What You Need to Know About Credit Card Debt Settlement By Vincent Polisi

If you have unsecured debts that you have no idea how you are going to pay, then you will want to read on. We will be taking a look at debt settlement. First, we will take a look at what you need to do before you attempt to settle a debt and then we will look at some important things to remember in the debt settlement process.
First try debt validation
Before you offer a settlement, you should first attempt to validate the debt. Debt validation is when you have the creditor prove that you owe THEM the debt. Send them a certified letter stating that you would like to get a copy of the original contract, a complete accounting and a contract between them and the original creditor that shows that they are entitled to collect the account. If they cannot provide you with this information, they must seize all collection efforts and remove the account from your credit bureau.
Check the statute of limitations
The statute of limitations is the time that a company can use the court system to collect on an account. The statue of limitations varies by state, but you should check your states statute of limitations prior to offering a settlement.
Begin debt settlement negotiations
If you are not able to remove the account from your credit file through debt validation, and the statute of limitations is still in effect on the account, then it is time to begin debt negotiation. You should call the collection agency and get a feel for where they stand. Make sure you have their physical address because you are going to want to handle all negotiations in writing. This provides you with the documentation that you need and prevents emotions from playing into the negotiation process. It also prevents the creditors from backing out from a verbal agreement that they made.
Depending on how likely they think you are to file bankruptcy, a company may settle for anywhere between 30-70% of your balance. Most settlements are in the 40-60% range. If they think that they may get nothing they are much more willing to offer a reasonable settlement.
It can take anywhere from a month to a year to reach a settlement agreement, depending on how quickly the lender is willing to move. Don't forget - get everything in writing before making a payment. Certified mail is the preferred method for all communications.
Vincent Polisi is the founder of Credit Repair College and Finance the Dream. To learn more aboutdebt settlement companies please visit us on the web.