The first option is Credit Counseling or Debt Settlement Companies. Credit Counseling intercedes for you negotiates to have your interest and penalties erased. Debt Settlement Companies do this too but they also negotiate to have your debt greatly reduced, by as much as 50%.
So why not use these options? Credit Counseling does not reduce your actual debt, and even though the interest and penalties may be removed, the monthly payments are extremely high, quite possibly higher that if you were able to make the minimum monthly payments on your credit cards. Debt Settlement Companies collect a huge fee for there services, usually 15 to 25% of your debt amount. They set up a special savings account for you to pay into each month, usually from 2 to 4 years. Of course, their fee comes out first. It takes a long time to accumulate the necessary funds to pay off your debtors, and the credit card companies are very impatient. The settlement companies are not in a position to start negotiating with the credit card companies until their fee is paid and you have accumulated enough money in your special saving account.
Retain a Lawyer
Your second option is to hire a lawyer. While this may sound like the best option, to have a lawyer negotiating for you, they are very expensive.
Lawyers charge by the hour, usually $200 to $350. And here is the truth about having a lawyer. You do not need one. Let me say that again. You do not need a lawyer. And the reason is simply that you can negotiate as good as a lawyer, and get as good of results.
Negotiate By Yourself
Option three, negotiating yourself, is your best option. And here is why. Even though creditors may seem difficult to work with, think of it from there point of view. Would they rather negotiate with a Debt Settlement Company or a lawyer, or work directly with you. They would rather work directly with you.
Here is why. They want their money. You can make negotiations to pay over time directly to them. And this is beneficial for you because you actually save a very substantial sum of money over using options one or two. You will find that most credit card companies are fairly easy to negotiate with, will in many cases reduce your principle amount way down (in my case as one reduced my debt by 70%).
There is no doubt the best way to settle your debts is by yourself. However, there is a skill to negotiating with creditors. Timing is critical. You need to learn when the best time is to negotiate. Too soon, you will not get the best payoff option. Too late, you may get sued. You also need to know what to say and what not to say. Remember, it is your money and you want to negotiate the best possible deal.
You will relieve a lot of mental and emotional stress by negotiating directly with your creditors, because you are in control and you know what is going on. You will pay off you debts much quicker and save yourself thousands of dollars.
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