I’ve been talking lately about acknowledging your financial situation, and taking steps to resolve any financial crisis situations. This is the time of year when many people get tax returns back, and are in a position for a potential debt negotiation. Of course, the best solution is to pay off your balance in full, or to even continue to make payments, but when that is not possible, there are circumstances where some creditors will settle your debt for a fraction of the total amount due.
Their best offer is usually a one-time lump sum payment, which a tax return or a bonus is good for. Other times, they’ll allow you to make payments on an agreed upon reduced amount. The MOST IMPORTANT THING is to get any settlement offer and acceptance IN WRITING before you make the first payment. Then, keep records and receipts of your payments with that letter, in a safe and easy to find place. You’ll also want to check your credit report a few months after it’s paid in full to make sure it is reflected there. If not, you’ll have your paper trail to rely on to get the situation rectified. While not the best case scenario, it should give you a positive feeling to know the debt is resolved, and it won’t be lingering over your head anymore.
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