The Truth of Credit

Just like most things debt that has been charged off is “very” negotiable. In fact there is a whole industry dedicated to this. As a collector often times I get extremely frustrated with people that actually pay a fee to have their debts settled. Understanding that some people just don’t want to deal with it but, I never could get how can you pay someone for a task you could easily do yourself (probably better than they do). In the industry we call this “Having Uncle Charlie pay your bills”.

Here are 3 tips to help you settle.

- Do your research beforehand. You need to know exactly how much you can borrow or pay to settle. Most people know they are in a financial mess you need to research and help yourself to get out the storm.
- Be realistic. Because of my experience in the credit card industry I can say that you can definitely settle for somewhere in the range of 70% - 40% . Keep in mind that most companies will write off the most of the interest and late fees but not the merchandise you bought.
- Start low to high. Understand the lower you settle that means less money you need to borrow or spend.

FYI there is a tax implication here. Anything over the $600 is taxed at ordinary income rate.

Please, I plead with you learn to negotiate. This is a life skill you will always need. The key to all this is educating yourself and having a plan. With that you cannot get screwed or be swallowed up by your debt.

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