Posts Tagged ‘debt settlement offer’

How To Respond To A Debt Settlement Offer?

If you have not made any payment toward a debt account for several months despite all those collection calls, the debt collectors are very much likely to make a debt settlement offer to you. As part of this offer, they may provide you an option to settle your entire debt by paying a reduced amount of money (less than what is outstanding in your name). You may be wondering why a lender or a debt collector would make such an offer that seems like a loss to them. Yes, it is true that by making this offer, they are actually agreeing to bear some loss, but they have their reasons.

The Fear Of Losing The Entire Debt

It is very important for you to keep in mind that there is a specific statute of limitations that applies for old debts. If this statue of limitations expires, lenders and debt collectors will no longer be able to collect the debts legally. Depending upon the state you are living and the type of debt you are having, this statute of limitations can be one year, two year, three year, or four years. In rare cases, it can be even longer, but usually it is somewhere between one and four years. This is in fact this fear of losing all of their money that you owe to them that forces them to make a debt settlement offer to you. But, before you accept any such offer, you must keep in mind a few things.

Do Not Do Anything That Resets The Statute Of Limitations

Always remember, the statute of limitations is calculated from the date when you made the last payment toward your debt. Look at how much time has passed since then. If the statute of limitations is very close and you make a small amount of payment when on the insistence the debt collectors, you will actually be resetting the statute of limitations. If your lenders and debt collection agents are requesting you to at least make a small amount of payment now and forget about the rest of the debts for some time, do not accept such requests. Instead, you should request them to make a reasonable debt settlement offer, where you should get a chance to repay all your debts in easy installments but by paying less than what you owe. If you are good in negotiations, you can easily convince your lenders to allow you to settle your debts by paying just 30-50% of the entire outstanding amount, that too, in small monthly installments over a certain period of time.

Lenders also make a debt settlement offer when they fear that you may end up filing bankruptcy because of your debt problems. Bankruptcy is a tough situation not only for debtors but also for creditors. Therefore, if you want a good deal in debt settlement, you may also try to convince your lenders that you are on the verge of bankruptcy, but not in a threatening tone. :)


Custom Search
Bankruptcy

Basic Things You Must Know About Bankruptcy Dismissal

When you file a petition for bankruptcy and the court rejects your petition on certain grounds, it is legally termed as bankruptcy dismissal. Dismissal means your case is officially closed and that the court will make no further rulings on your case. Some of the most common reasons why a petition is...

Bankruptcy
Credit Repair

Building Credit With No Credit

When it comes to building credit with no credit, there are several online canadian pharmacy factors that you need to take into account. Just because you do not have any credit history at present, it does not mean you will never have one. No one is born with a readymade credit history. You have to gi...

Credit Repair

A Loan To Defeat All Loans Debt Relief Loan
Payday loans fax-free payday loans and instant online payday loans are everywhere be it on the Internet newspapers or television. Today when the economy is in turmoil these loans look like the saving gra... Read more

Tips On How To Consolidate Payday Loan Debt
You may need to consolidate payday loan debt when you are caught in the middle of a financial crisis arising out of your inability to repay multiple loans. Debt consolidation loan allows you to consolidate all... Read more

Do Not Put Up With Debt Collectors Harassment
There was an emergency and the need arose to take a payday loan. It seemed to be the fastest and the best option available then. However now the debt collectors harassment is horrendous. The fact that using t... Read more

Consolidate Payday Advances To Save Yourself
Payday advances are loans taken against a persons paycheck. They have a way of digging into your paycheck month after month. They usually have exorbitant interest rates though the sites offering the services... Read more

Can I Consolidate Payday Loans
Can I consolidate payday loans is a question you are sure to ask yourself when faced with a trying financial situation. When payment of loans becomes difficult it is possible to consolidate and replace many... Read more

What are the pros and cons of debt consolidation?