More Debt Settlement Strategies
Understanding Unsecured vs. Secured Debt and tips to settle your bills.
These debt settlement strategies can help you get out of debt faster, cheaper and back on the road to financial recovery.
Debts that are Good Candidates for Settlement
To make things clearer, let’s distinguish between two major categories of debt:
secured and unsecured.
Unsecured debts consist of:
- bounced checks
- personal loans
- student loans
- medical bills
- credit cards
- department store cards
- gas cards
Secured debts usually consist of:
- home mortgage and/or equity loan
- auto loan
- recreational vehicle loans (boats, RV's, etc)
In the case of a secured debt, a valuable property, such as an automobile or
a home, is offered as a promise to the creditor if the debtor is unable to make
his payments, or defaults, on the loan. You will be unable to settle these debts,
because the creditor will look at the promised property as the "settlement"
itself.
In the case of unsecured debts, there is nothing being promised as repayment.
These loans are usually given to people who have good credit. Since creditors
have no way to ensure that they will receive anything from you, they will be
much more willing to settle these types of debts.
One thing to note however, in most states, failure to redeem a bounced check
can be criminally prosecuted. If you have any outstanding bounced checks, get
these paid first, even if it means payment in full without reduction of the
amount owed. Criminal charges will follow you for life, and could land you in
jail!
Here are the two cases when the creditor will settle with you:
- If the Creditor feels it is in the company's best interest to settle
(you can persuade them it is their only chance to receive something)
- If they believe you do not possess many assets (there is no point in suing
you because even if they win, there’s nothing they can collect from you).
So, this means that if you've always been punctual with your payments and then
you suddenly call up your credit card company to inform them about your difficulties,
they will certainly be doubtful and will hardly make a deal with you.
Of course, this doesn’t mean that you should stop paying your bills just to
encourage them to settle. It’s always better to first have a sincere discussion
with them.
Where To Turn If You Want Help
Sometimes doing this yourself can be quite time consuming. Also, considering
you aren't a debt settlement specialist, you might not get the best deal possible
if you do it yourself.
Consider the savings you can obtain if you use a specialist who has the knowledge
to squeeze the last cut penny from the creditor ... when a specialist has the
contacts, knowledge and experience, you can save MUCH more than just 40% or
50% off what you owe.
Get a free no obligation evaluation
now.
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