Do-it-yourself debt settlement - Reduce your debts all by yourself

Debt settlement can be a great help when your outstanding debt amount is too high. It is one of the most effective ways to get rid of your loans/debts quickly. Debt settlement refers to the process of negotiating with your creditors to reduce the amount you owe to them. Therefore, this process also referred to as debt negotiation or debt reduction.

When you should go for debt settlement

You can think of settling your debts when you experience any of the following situations.

You have huge amount of multiple debts to pay off
Due to high interest rates, your outstanding debt amount is increasing every month
Your financial condition is not permitting you to make even the minimum payments every month
Your monthly expenses are more than what you earn

What type of debts you can settle

Before contacting your creditors you should know that you’ll not be able to reduce each and every debt with the help of debt settlement. As for example, you cannot reduce your income tax payments or any of your secured debt, such as, your mortgage as car loan. However, you can negotiate with your creditors to reduce your credit card bills, utility bills, unsecured personal loans, store credit card bills, etc.

Do it yourself debt settlement

You can take help of a professional debt settlement program to reduce your debt burden. However, you can also do it on your own. If you settle your debts on your own, then you can save the money that you need to pay to the settlement company if you take help of a debt settlement program.

First of all, assess your financial condition by taking into account how much you owe to your creditors along with calculating your monthly income and expenditure. You’ll also have to plan a budget so that you can calculate how much you’re able to save every month. Then, contact your creditors, explain your financial condition and negotiate with them in order to reduce your debt amount. It is advisable that you negotiate with one creditor at a time.

In the meantime, accumulate the amount that you’re able to save from your income every month. Use this fund to repay your creditors as soon as they agree upon a pay off amount. Usually, a successful negotiation can reduce the debt amount by about 40-60% of what you owe. In this way, pay off your debts one by one and get debt free quickly.

Taking help of a debt settlement calculator

You can browse through the websites to find a debt settlement calculator in order to compute how much you’ll have to pay if your creditors reduce your debts to about 40-60%. The settlement calculators’ work on a specific principle and it takes a specific percentage (between 40-60% to calculate) that depends on its algorithm.

You can speed up the process of debt settlement by liquidating your savings account or taking out a loan from your life insurance policy. If required, take help of a financial advisor to decide which option may be the most suitable for you.


Keyphrase: debt settlement   

Description: Debt settlement – Get to know what types of settle you can settle and when you should go for it. Know how to settle debts on your own.