Debt Settlement Software - doing your own debt settlement

   The business of credit card debt is exploding tremendously these days. The consumers are bound to use credit cards because the increase in unemployment and expenditure has made consumers powerless in damage of fulfilling their needs and wants. If you're knee deep in debt, cannot pay your bills, and wish to avoid collection calls you may want to consider debt settlement (also known as debt negotiation). This is where you negotiate with your creditors to reduce your outstanding debt by 40-60%. The creditor forgives the rest of the debt, helping you to get out of debt.Debt settlement: Negotiating away your bills is legal, creditors most of the time agree to settle your debts than have you file bankruptcy and not get paid at all, but it may not be your best solution. And sometimes, hiring a professional to help you isn't as good an idea as doing it yourself. Debt settlement is, in fact, a perfectly legal solution for consumers who are seeking an alternative to bankruptcy. But having a debt-settlement company do the legwork for you is fraught with risk, not to mention outrageous fees.

   The problem with debt-settlement companies Once you sign up with a company, chances are you'll pay Outrageous fees. Some companies charge a percentage of the total debt between 15% to 18% and that's paid before you start,Others
debt settlement companies will charge a percentage of the debt savings around 25% once you settle, plus an initial sign-up fee and monthly service charges. Then there are those debt settlement companies that charge a flat monthly fee throughout the length of the program. The debt settlement company holds your money in an escrow account withdrawing monthly fees if applicable, until the account has a target amount to negotiate with the collection agency.

   During this period you still will receive calls from collection agencies. When creditors find out your working with a debt settlement company, they will often send it to collections sooner and in some cases they will take legal action and if the
debt settlement company is not attorney based then they can not provide you legal advice. So they will end up dropping your case leaving you in a worse situation than you started.Perhaps due to poor budgeting or frustration many consumers drop out of the debt settlement program before reaching a settlement. Your credit will suffer. Creditors don't settle unless you're severely behind on your payments. There are tax consequences. Debt settlement is a taxable event. Any forgiven balance that exceeds $600 is taxable income, this can put people in worse shape than they were in to begin with. Their services might be illegal. Though the laws regulating debt-settlement companies vary greatly by state, it's worth noting that 12 states prohibit for-profit debt management. Since debt-settlement companies are for-profit entities, they're not allowed to practice there. Those states are Arizona, Georgia, Hawaii, Louisiana, Maine, Mississippi, New Jersey, New Mexico, New York, North Dakota, West Virginia and Wyoming.

   You can do your own debt consolidation from The Total Money Makeover "process called the debt snowball to do one thing at a time and keep the debt reduction process simple " states Dave Ramsey on Debt Reduction. The Build Real Credit Software breaks it down to a simple process using the budget from the software you will know how much you can afford and how long before you can settle your debt. Select the debt with the smallest balance and when you have saved enough into the special savings account you set up you will mail in your offer if they accept to your offer they will mail you back an acceptance letter make sure when sending payment amount never use a check with your banking information and always send it certified mail and request a paid in full letter be mailed to you once payment has been recieved. If theydo not accept your offer apply those funds to the next smallest balance owed. When it comes to credit cards call your credit card company with the highest intrest and ask if they would be willing to lower your intrest or even offer 0% APR for 12 months to help you catch up and avoid having to move your balance to another credit card company.

How to settle your debts yourself if the debt settlement is held by a collection agency

   Step 1: Send a debt validation letter to verify that you owe the money. Accept a reply only when it contains the following, Proof that the CA has been assigned to collect the debt by a creditor.A Detailed payment history starting with the original creditor. A Copy of the original signed debt agreement or credit card application. If the reply is not satisfactory, inform the CA that they are violating the Fair Debt Collections Practices Act and they need to remove the collection listing from your credit report

   Step 2: If the CA validates the debt, you need to contact the creditor. Ask them to pull your account back from the collection agency. If your creditor doesn't pull back the account from the CA, negotiate with the collection agency. Inform them that you are sending this offer to all your creditors and the ones who accept the offer first will be paid first.

   Step 3: Offer a lump sum payment to the creditor. If you don't have enough money, make your creditor(s) aware of your inability to pay the total debt in a lump sum, off Short duration payment plan, If you are capable of clearing your debt balance within a span of 3-6 months there is a possibility that the creditors will reduce your debts to an affordable amount. It might happen so, that your late fees and taxes willalso be waived off by the creditor. Keep all acceptance letters, send in the amounts agreed upon, and request a receipt stating that the debt has been "Paid in full".