January 24, 2006
Do-It-Yourself Debt Settlement Options
The great thing about a do-it-yourself debt settlement option is that you don't have to qualify and you can do it no matter how bad (or good) your credit is.
This debt settlement option is the most versatile of all the options. There are no qualifications to meet...there are no states that you cannot do this in...
There is none of that.
What a performance-fee or front-fee based debt settlement option can't offer β do-it-yourself debt settlement can.
Some the of the greatest benefits to doing it yourself are...
But it also has some major drawbacks as well...
Fortunately, it doesn't take long to learn the ins and outs of debt settlement to get yourself the best settlements.
Of course...there are some companies out there that cater to coaching you on a one-on-one basis to teach you everything that you need. By being coached you can and will learn how settle with your creditors.
Then you could take this knowledge and start teaching your friends and family and maybe make this into a business...
I did this with Jennifer, and she did awesomely...
She could not afford to do any settlements with a company as she just did not have the funds to set aside each month to use a debt settlement company. Her only debt settlement option was to do it herself...and she had two of the hardest creditors ever!
She was desperate. Later she told me that this was the lowest time in her life. However, I coached her through the settlement process and keep her motivated as she came through it with flying colors.
Within five months she...
And because she did the debt settlement and improved her credit score, she was approved by her state's government to get training to get a new career.
You may be thinking that her scene must not have been that tough, but factually she had one of the toughest situations that you could possibly have.
You see she suffered from a mental disability and could no longer work. She was only getting about $500 a month for living expenses and did not have any assets or reserves. Yet she settled over $30,000 in debt...to two of the toughest creditors around...and did it in less than six months...and she improved her credit score as well.
That is the power of doing it yourself.
I would only recommend doing it yourself under these conditions:
Of course...you would never use a debt settlement option just because you were mad and wanted to get back at your creditors. Debt settlement should only be used when all other options have failed.
Dealing with the creditors
You will have to deal with the creditors yourself when doing this debt settlement option.
Creditors can get quite nasty when they are trying to collect what they believe is their money. Just go on the internet and you'll see so many horror stories of debt collectors just harassing people βit'll make yer head spin.β
They can and WILL get very pushy. Especially if you have fallen behind in payments.
The original creditors (OC) can be decent to work with, but collection agencies, as a generality, are the bottom feeders.
This is a major reason the performance-fee based debt settlement options work so hard to ensure that your accounts do not charge-off.
So if you go this route of do-it-yourself debt settlement then be prepared to deal with the creditors.
Lack of knowledge to get the best settlements.
Not having the ins and outs of debt settlement industry is a big barrier for you.
Most of the debt settlement companies out there have been doing settlements for years. They know who to speak with, know what questions to ask and what to say, they know when to say some things and not say them, they know what forms to fill out, and...
They know just how to keep the debt collector off your back for long enough time for you to do the plan.
By doing it yourself you will not have these advantages.
Some banks, like MBNA (but only if they know you are not working with a company), will hand you sweet deals without you even lifting a finger. Others, like Citibank and Chase, you'll have to work for.
Of course, with persistence and insistence, you should be able to work out deals of 50 cents on the dollar or less.
Lack of knowledge of the laws.
This is biggest headache...in my humble opinion...you'll run into with trying to do settlements yourself.
After charge-off the OC will assign (send) your account to a collection agency (CA).
The CA is only by law allowed to collect the debt for the OC. You do not owe the CA any money. Of course...they'll harass you to make you think you do...but don't fall for it.
Exception: After 2 or 3 years an OC may sell your account to a collection agency. The CA s are often refer to as Junk Debt Buyers (JDB). They do own your account and can collect and keep all the money you pay them.
When a CA collects any money from you for a debt, they pass on a portion of that money to the OC and keep a portion as their commission.
An OC may have your account sent to various CA s, especially if they are not making any head way in collecting.
Sometimes a CA is an attorney firm. They will collect just like any other CA but with one major exception...after a certain time...they can sue for the debt. IF you have Citibank, MBNA, Discover, Amex (American Express) or any retail or gas cards, then you stand about a 75% chance of getting sued...in my estimation...especially if the amount due is $2000-$2500 or more.
No CA may sue you for monies owed unless they have written permission from the OC beforehand.
Key laws that you should know are...
The Fair Debt Collection Practices Act (FDCPA) are the rules that mandate the CA s on collecting debts from you. You need to know these rules COLD.
I bet you that if a CA is trying to collect on a debt from you that they are violating one of these rules.
The Fair Credit Report Act (FCRA)are the rules that cover how the debts are to be reported by the OC's and CA's. Violation of the FCRA is the favorite tactic used by the CA's for your submission into paying up.
Finally, knowing the state and local laws governing CA's and OC's is a must! In some states, it is illegal for CA's to collect from you if they are not licensed in that state. You can find out about these laws with your state's Attorney General.
To learn about the FDCPA and FCRA then go to www.ftc.gov.
In summary.
I did not try to go into exactly how to do a do-it-yourself debt settlement, but only to give you a basic, general understanding of all that is involved.
No matter whether you use a performance-fee based, a front-fee based or a do-it-yourself debt settlement option you need to know what you are getting into. I hope that this helps you better understand this option so that you can make the best decision for your situation.
This debt settlement option is the most versatile of all the options. There are no qualifications to meet...there are no states that you cannot do this in...
There is none of that.
What a performance-fee or front-fee based debt settlement option can't offer β do-it-yourself debt settlement can.
Some the of the greatest benefits to doing it yourself are...
- Save all the money that you'd otherwise spend in fees.
- You control all of your money.
- You can protect and improve your credit.
- Take as long as you want or need to get out of debt.
But it also has some major drawbacks as well...
- You have to deal with the creditors personally.
- Lack of knowledge to get the best settlements.
- Lack of knowledge in the laws.
Fortunately, it doesn't take long to learn the ins and outs of debt settlement to get yourself the best settlements.
Of course...there are some companies out there that cater to coaching you on a one-on-one basis to teach you everything that you need. By being coached you can and will learn how settle with your creditors.
Then you could take this knowledge and start teaching your friends and family and maybe make this into a business...
I did this with Jennifer, and she did awesomely...
She could not afford to do any settlements with a company as she just did not have the funds to set aside each month to use a debt settlement company. Her only debt settlement option was to do it herself...and she had two of the hardest creditors ever!
She was desperate. Later she told me that this was the lowest time in her life. However, I coached her through the settlement process and keep her motivated as she came through it with flying colors.
Within five months she...
- handled both creditors.
- Improved her credit to over 700
- had one of best Christmas's ever.
- She is now teaching what she learned from me to her family and friends to help them with their debt problems.
And because she did the debt settlement and improved her credit score, she was approved by her state's government to get training to get a new career.
You may be thinking that her scene must not have been that tough, but factually she had one of the toughest situations that you could possibly have.
You see she suffered from a mental disability and could no longer work. She was only getting about $500 a month for living expenses and did not have any assets or reserves. Yet she settled over $30,000 in debt...to two of the toughest creditors around...and did it in less than six months...and she improved her credit score as well.
That is the power of doing it yourself.
I would only recommend doing it yourself under these conditions:
- You can deal with stress and pressure.
- You live in one of the 10 states where debt settlement is frowned upon when using companies.
- You live in one of the 5 states that favor the creditors rather than you (see the front-fee based debt settlement option for more details.)
- You cannot afford a debt settlement company
- You need more time than a debt settlement company can provide.
Of course...you would never use a debt settlement option just because you were mad and wanted to get back at your creditors. Debt settlement should only be used when all other options have failed.
Dealing with the creditors
You will have to deal with the creditors yourself when doing this debt settlement option.
Creditors can get quite nasty when they are trying to collect what they believe is their money. Just go on the internet and you'll see so many horror stories of debt collectors just harassing people βit'll make yer head spin.β
They can and WILL get very pushy. Especially if you have fallen behind in payments.
The original creditors (OC) can be decent to work with, but collection agencies, as a generality, are the bottom feeders.
This is a major reason the performance-fee based debt settlement options work so hard to ensure that your accounts do not charge-off.
So if you go this route of do-it-yourself debt settlement then be prepared to deal with the creditors.
Lack of knowledge to get the best settlements.
Not having the ins and outs of debt settlement industry is a big barrier for you.
Most of the debt settlement companies out there have been doing settlements for years. They know who to speak with, know what questions to ask and what to say, they know when to say some things and not say them, they know what forms to fill out, and...
They know just how to keep the debt collector off your back for long enough time for you to do the plan.
By doing it yourself you will not have these advantages.
Some banks, like MBNA (but only if they know you are not working with a company), will hand you sweet deals without you even lifting a finger. Others, like Citibank and Chase, you'll have to work for.
Of course, with persistence and insistence, you should be able to work out deals of 50 cents on the dollar or less.
Lack of knowledge of the laws.
This is biggest headache...in my humble opinion...you'll run into with trying to do settlements yourself.
After charge-off the OC will assign (send) your account to a collection agency (CA).
The CA is only by law allowed to collect the debt for the OC. You do not owe the CA any money. Of course...they'll harass you to make you think you do...but don't fall for it.
Exception: After 2 or 3 years an OC may sell your account to a collection agency. The CA s are often refer to as Junk Debt Buyers (JDB). They do own your account and can collect and keep all the money you pay them.
When a CA collects any money from you for a debt, they pass on a portion of that money to the OC and keep a portion as their commission.
An OC may have your account sent to various CA s, especially if they are not making any head way in collecting.
Sometimes a CA is an attorney firm. They will collect just like any other CA but with one major exception...after a certain time...they can sue for the debt. IF you have Citibank, MBNA, Discover, Amex (American Express) or any retail or gas cards, then you stand about a 75% chance of getting sued...in my estimation...especially if the amount due is $2000-$2500 or more.
No CA may sue you for monies owed unless they have written permission from the OC beforehand.
Key laws that you should know are...
- The FDCPA
- The FCRA
- State and local laws.
The Fair Debt Collection Practices Act (FDCPA) are the rules that mandate the CA s on collecting debts from you. You need to know these rules COLD.
I bet you that if a CA is trying to collect on a debt from you that they are violating one of these rules.
The Fair Credit Report Act (FCRA)are the rules that cover how the debts are to be reported by the OC's and CA's. Violation of the FCRA is the favorite tactic used by the CA's for your submission into paying up.
Finally, knowing the state and local laws governing CA's and OC's is a must! In some states, it is illegal for CA's to collect from you if they are not licensed in that state. You can find out about these laws with your state's Attorney General.
To learn about the FDCPA and FCRA then go to www.ftc.gov.
In summary.
I did not try to go into exactly how to do a do-it-yourself debt settlement, but only to give you a basic, general understanding of all that is involved.
No matter whether you use a performance-fee based, a front-fee based or a do-it-yourself debt settlement option you need to know what you are getting into. I hope that this helps you better understand this option so that you can make the best decision for your situation.
# posted by Sponduliqs @ 2:22 PM 
Subscribe to Posts [Atom]