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Going From Zero To Hero - How To Settle Your Credit Card Debts Without Incurring Any Costs
Finding yourself in a jam as far as repaying your credit card debts is concerned can be a very stressful and emotionally trying experience. Having to incur further costs to help solve this problem would only make things worse. However, there is a way you can settle your debts at no additional costs.
Do-It-Yourself
As with most other areas in life, it is always cheapest to get things done yourself, rather than paying someone else to do it for you. However, settling credit card debts is not something that can be easily done, and requires a lot of planning and attention to details. Nevertheless, it is not an impossible thing to accomplish, if you are determined and well prepared in handling it.
Getting The Ball Rolling
Begin by listing down what your outstanding debts are, what are the specific amounts and related costs (interest rates, etc) and who the money is owed to. If you find it helpful, request from creditors a breakdown of your bill so you are aware of what are the actual amounts owed and which are the additional fees that have accrued to you.
Debts Vs. Income
Examine carefully ...
... what your current income level is like and evaluate how much you can realistically set aside to pay off your debts each month or in a lump sum.
A Methodical Approach
Next, consider what options are available for you as far as working towards settling those debts are concerned.
Basically, there are four main methods you can consider:
Lump sum settlement.
By negotiating with your creditors, you may be able to work out an arrangement where you are able to pay off your debts for an amount less than the originally owed debt. However, do bear in mind that this type of agreement would be viewed as equivalent to a charge-off.
Debt management program.
This involves enlisting the services of a third party to liaise with your creditors. The thought may have crossed your mind that this option would definitely incur some extra costs to you. However, this is not necessarily always the case, since in some situations debtors may have access to a Debt Management Plan (DMP) organisation that is sponsored by their creditor.
Workout arrangement.
Under this sort of arrangement, your creditors would stop charging you interest or may even lower it, in addition to eradicating any outstanding punitive fees such as any over-limit charges or late fees. The downside of this option is that your credit line would most definitely be cut, and there may be negative implications to your credit score, depending on how your creditor reports on this agreement.
Forbearance.
If you are quick enough to identify a financial road bump up ahead, one way you could prevent getting into trouble with your creditors is to get in touch with them and request for a forbearance program. In this case, you would then be granted a period of reprieve from having to make repayments for an agreed period of time.
Make The Call
Put on your most pleasant voice, think positive thoughts and boldly take a step forward by contacting your creditors. There is no guarantee that it will be an easy process communicating with them, so you have to persevere and always keep in the end goal in mind. It may be hard to get yourself in touch with the right person who has the authority to agree to your proposition, so be mentally prepared to keep trying until you get through. Assuming you manage to get the person on the phone, remember to note down the person's name and contact details (such as their ID number or their direct telephone extension number). Be ready to explain your predicament in the most brief and easily understood way possible. Keep a record of all correspondence that takes place from then onwards, as you may need to refer to it later on.
The Pen Is Mightier Than The Sword
As the saying goes, "The pen is mightier than the sword", and with regards to your credit card debts, putting your pen to paper to write out a debt settlement letter may go a long way in helping you to finally find a way out of your sticky financial situation. It is an alternative option to calling your creditors directly via the phone, which is especially appealing to those who are not very confident in asserting themselves in verbal conversations. Such letters constitute a legally binding document and should be written with much care and thought.
Here are some guidelines on how to write a debt settlement letter:
Look up existing debt settlement letter templates and use it as a basis to write your own.
In the contents of your letter, explain to the relevant party (the Credit Officer from the bank or credit card company to which you owe your debt) your present financial difficulty.
Propose how you plan to repay your debt and include any details which may add a persuasive effect.
Make sure to include your contact details in the letter.
Ultimately, the final decision on whether or not your requests for a settlement are accepted rests with your creditors themselves, but being proactive in coming up with a practical solution to the problem may end up working to your advantage. After all, what the creditor wants more than anything is some amount of repayment from you rather than none at all. Although working through this process independently without any professional aid may seem daunting, you will be glad to have saved on the additional fee charges at the end of the day when your efforts finally pay off.
For more information about debt settlement letter, visit http://DebtSettlementChoice.com
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