Make settling debt easy with these seven steps

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When settling debt, you must be vigilant to make sure it has been completely taken care...

When settling debt, you must be vigilant to make sure it has been completely taken care of. Keeping track of your credit report is a good way to determine that there isn't any unwarranted activity or problems. The following are several steps you can take to be sure your debt is entirely settled.

Get all the information

The first step is to call your creditors and record all the information that has to do with your debt. This includes the name and phone number of the person in charge of the account, the full amount owed, payment history and from where the debt originated. This way, you will have a clear picture of what steps you need to take to settle the debt.

Try to avoid collections

An account that has been sent to collections can dramatically interfere with your credit score. Instead, talk to the company that holds the loan and work out a payment plan that helps you catch up, so the debt is current. This way, you can continue to make payments to settle the debt and resolve the issue.

Inquire about zombie debt

In many cases, debt has a statute of limitations - if it's very old, you may not be held responsible for it. This means that the debt collection agency didn't do enough to acquire the debt and is now responsible for it. Don't agree to make any payments until you ask for and review your debt verification/validation letter to make sure your debt isn't zombie debt.

Make a doable offer

It doesn't make sense to agree to a repayment offer you can't manage. It might get the collector off your back for a short time, but if you can't make the agreed-upon payments, you'll be back to square one. Stand firm and only agree to a payment schedule you can reasonably afford.

Negotiate

Debt collection agencies often buy debt at a reduced cost, so they can afford to negotiate with you a bit. Sometimes, you can get a reduced fee by agreeing to pay your debt in one or two large sums rather than setting up a long-term payment plan.

Know your rights

As you go through the process of settling debt, it is important to understand your rights. For example, creditors are only allowed to call during certain hours of the day. Knowing your rights ensures you aren't harassed and can benefit from your debt settlement plan.

Ask for the right report

When you have the debt recorded on your credit report, ask that it be "paid as agreed upon" rather than "settled." This is better for your overall credit score.

If you need more help settling debt quickly and efficiently, set up a meeting with an Atlanta financial advisor who can help you figure out the best course of action.


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