Repair Your Credit by Negotiating Debt Settlements with Your Creditors

A Credit Article Contributed by Brandie King

If you are at the end of your rope and close to having to file bankruptcy, then you should consider repairing your credit by settling your debts with your creditors.

Creditor Credit Repair: What is a Debt Settlement?

Debt settlement is negotiating with a creditor to pay off a percentage of the total debt balance.

Debt settlement works best for those who are experiencing financial hardships. Some examples:

- unsecured debt above $10,000

- job loss or pay decrease that results in no longer be able to afford payments on debts

- medical emergency happened that caused inability pay bills, and/or caused additional bills

- extremely high frustration levels due to paying a lot more than the minimum monthly payments and the balances never seeming to decrease

Creditor Credit Repair: What Can Be Included?

Debt settlement is usually used for unsecured debt, not secured debt. Unsecured includes credit cards, store cards, medical bills, old utility bills, personal loans, business debts, etc., and is not limited to just those items listed.

Creditor Credit Repair: Benefits

By negotiating with your creditors to settle your debts you can save up to 70% on those debts. Settling your debts will prevent you from having to file for bankruptcy. May help to stop creditor and collection agency phone calls and letters. Provides the possibility of resolving debt-related lawsuits without having to go to court. Can make your credit report look better by showing future potential creditors that you paid your debts instead of filing bankruptcy and lowering your debt-to-income ratio.

Creditor Credit Repair: Likelihood of Creditors Accepting a Debt Settlement

Creditors are usually willing to work out a debt settlement with debtors because they know that most people looking to settle their debts are doing it as a last ditch effort to avoid bankruptcy. If you file bankruptcy then the creditor gets nothing, and they would much rather get at least part of the debt through a debt settlement than none of it at all.

Creditor Credit Repair: How to Get It Done

The easiest way to use debt settlements to repair your credit is to work with a company that specializes in doing this. These are not credit counseling or credit repair agencies. Working with a company that specializes in doing debt settlements is better for you because they know what creditors have done in the past and are likely to do again and they know your rights under the current laws.

If any company guarantees that any creditors, or every creditor, will accept your debt settlement offers then do not use them. Nobody can guarantee that the creditors will agree to accept only part of what they are due. Some companies will guarantee that you will not have to pay them unless they reduce the amount of debt you own through debt settlements. These companies are perfectly fine to work with.

Here are a few companies for you to check out:

Kahn & Associates, L.L.C. http://www.kahnandassociates.com/index.htm

Carreon and Associates http://www.carreonandassociates.com/

US Credit Management http://www.uscreditmanagement.net/

The Debt Reduction Group http://www.knockoutdebt.com/debt-settlement/index.aspx