Debt Negotiation > Will It Work For You?
WILL THE DEBT NEGOTIATION STRATEGY WORK FOR
We’ll be the first to admit that the debt
negotiation strategy is not for everybody. But for
those who qualify, it’s a no-nonsense financial
recovery program that makes good sense.
The list of questions below will help you
decide whether or not you should consider debt
1. DO YOU HAVE A LEGITIMATE FINANCIAL HARDSHIP
This will usually take the form of loss of
income, medical condition, death of a family
member, divorce or separation, loss of child
support payments, or some other serious event that
caused a severe financial setback. It doesn’t
always have to be drastic, but there should be an
identifiable circumstance (or set of
circumstances) that got you into trouble.
2. ARE YOU
COMMITTED TO AVOIDING BANKRUPTCY?
Just about every debtor who tries to negotiate
with a bank threatens bankruptcy. A proper debt
negotiation strategy will take the opposite
position, by promising that bankruptcy will not be
filed if the creditor agrees to a workable
arrangement. This promise is essential to the
3. DO YOU OW MORE THAN $7,500 IN UNSECURED
If your debt level is much below that, it
becomes unrealistic to apply negotiation
strategies at the aggressive level we’ve been
discussing. Discounts can still be obtained and
favorable arrangements made, but frankly, major
reductions in debt are much more difficult to
obtain. A level of $20,000 to $50,000 is more
typical, although there is no fixed rule. It also
depends on the exact nature of the debt.
4. ARE YOUR DEBTS PRIMARILY FROM CREDIT
The negotiation strategy described above works
well for a variety of debts, but the hands down
winner is credit card debt. The steepest discounts
and greatest success can be obtained with credit
card accounts. Department store charge cards,
financing contracts, and miscellaneous bills can
also be negotiated, but with less predictable
results. Medical bills are often negotiable,
depending on the background of the case, usually
with good results. Student loans cannot be
negotiated (since these are Federal loans, Uncle
Sam can dip his hands into your tax refund to
collect the balance). Auto loans can be
refinanced, but generally not reduced. Mortgages
can be rescued from foreclosure with a variety of
techniques, but of course you’ll still be on the
hook for full value.
5. IS YOUR MONTHLY BUDGET UP TO THE JOB?
All the best intentions in the world won’t
help if you have nothing to offer your creditors.
A good rule of thumb is that your monthly budget
should be around $150-$200 for every $10,000 of
debt. So if you owe, say, $30,000 total, then your
monthly budget should be around $450-$600.
6. DO YOU HAVE ADDITIONAL RESOURCES TO WORK
Even if you can only manage a small monthly
amount toward debt reduction, are there other
resources at your disposal? Examples include
cash-value insurance policies, borrowing from
family, or even the sale of unneeded household
items. Is there other property you could sell to
If you are in a condition of financial
hardship, committed to avoiding bankruptcy, owe
more than $7,500 of credit card debt, and have
some resources to work with, then you should
definitely give serious consideration to the debt
FREQUENTLY ASKED QUESTIONS
1. WHAT HAPPENS TO MY CREDIT?
Your credit score will decline during the
program itself. How much it will decline will
depend on your original circumstances. Some of the
accounts you place into negotiation are likely to
“charge off”, which will reflect negatively on
your credit. However, once a debt is settled, the
settlement is reported to the credit bureaus.
Settled accounts are positive compared to
unresolved delinquent debts or bankruptcy. After
all the debts have been settled, the credit score
will begin to improve since the negative items
have been resolved. In addition, your
debt-to-income ratio (an important measurement
made by potential lenders that is not always
directly reflected in your credit “score”) will
greatly improve, since you will be debt-free.
There are also several useful techniques for
repairing your credit later on. Of course, credit
is an important thing to have, but obviously your
first priority should be to clear up your debts
and get back on your feet financially. Once you
are ready, we can assist you with the process of
2. HOW DOES THE ATTORNEY GET PAID?
Good debt negotiators work on a contingency
basis. This means that unless they achieve an
acceptable settlement, they are not entitled to
any fees for their services. Further, most
negotiators charge a fee that is based on the
amount of savings they achieve. When the fee is
structured this way, the client is always in a NET
SAVINGS POSITION. There is typically an enrollment
or administrative fee at the start of the program
to establish your account, as well as a small
monthly charge to maintain your account.
3. IS THIS LEGAL?
Definitely! You have the right to appoint a
third party to represent you in debt matters. We
have settled debts with the largest credit card
banks in the nation on behalf of our clients.
4. WHAT ABOUT LAWSUITS?
Lawsuits happen less frequently in debt
matters than most people think. Some debtors fall
behind, don’t make any payments for years, and
never hear from a single attorney. Of course,
creditors certainly have the right to sue you to
recover their money. But the purpose of the
lawsuit is to force a settlement on the matter. In
other words, the creditor is just trying to get
paid. Accounts that have reached this stage can
still be successfully settled, provided the client
has sufficient funds at the time. Otherwise, most
creditors are amenable to renewed payment
arrangements in such a situation. The worst-case
scenario is that a client might have to pay back
the balance in full on that particular debt.
5. CAN MY WAGES BE GARNISHED?
A common tactic used by aggressive debt
collectors is the threat of wage garnishment. If
you’re already struggling financially, nothing is
scarier than the prospect of having money taken
out of your paycheck without permission.
Collectors try to make it sound like this will
happen on your very next payday if you don’t send
a check immediately.
This, quite simply, is false. The creditor
first has to sue you, obtain a judgment, and then
file for a garnishment action. If you’re willing
to work with your creditors, wage garnishment can
normally be avoided.
6. CAN I DO THIS MYSELF?
Certainly, but we can’t imagine why you’d want
to! Any discounts you achieve on your own will not
be as deep as those obtained by a professional,
and you’ll spend countless frustrating hours in
7. WILL I STILL BE ABLE TO USE MY CREDIT
No. Since the banks are giving up half or more
of the money you owe, they will of course
discontinue your credit privileges. However, many
clients keep current on one card with a small
credit line for emergency purposes.
WHAT’S THE NEXT STEP?
To see whether you qualify for this program,
just give us a call at 1-800-975-5346. We offer a
FREE PHONE CONSULTATION with NO OBLIGATION.
After we’ve gained an understanding of your
situation, we can advise you whether this approach
will work for you. That’s it! Let us hear from you
You have nothing to lose, except that mountain
Call 1-800-975-5346 today!
Take action now!