Consumer Credit Counseling

In debt burdened conditions it might often happen that you may find it almost impossible to pay back your debt amounts. The situation might worsen to such an extent that you may need to file bankruptcy in the near future. In this case all the previous amounts you have paid the creditors goes in vain. With bankruptcy process you have to start the whole operation of paying back from a scratch. We feel that filing bankruptcy is not an ideal move.

Keeping the above point in mind we recommend you with few other tips which you can try out in order to avoid bankruptcy:

• Take the resource of time:
Time is the best healer. The creditors in your case will also stop pursuing you as a considerable period of time passes by. If your debt remains uncollected for a long time it also increases your chances of a reasonable debt settlement. At a certain point of time the creditor will consider the debt amount as loss to get a corporate tax write-off. But this doesn't mean you will not be persuaded by the creditor to pay back your debts. The credit company can collect the debt themselves, sell or assign it to a collection agency, pursue the case legally for wage garnishment and sometimes can even ignore it for the time being. If you are contacted by more than one collection agency on the same debt, it is a good sign for you. This indicates that, the creditor as well as the first collection agency has given up hopes on you. At this stage different collection agencies can charge different rates. If the agency has failed to contact you by phone, and is aware that there is no response from you even after receiving letters. In these cases you can be sure of getting a deal for a lesser amount.

• Eagerness to debt settlement should be less:
Go on negotiating till you have your say or arrive at an agreement suiting you. Show less interest in settlement of debts and always allow the creditor to pursue the matter. Remember, you can get a favorable settlement only if the creditor is cornered and not you. If the creditor can smell that debt settlement, it may not be beneficial to you, and then you will have no hope to get a settlement in your favor. The creditor may now demand for the full balance.

• Make the creditor aware of Statute limitations:
Don't forget to make the creditor aware of statute limitations. Also make sure he knows that only a limited period of time is there in his hand. Keep a track of new statutes and update the creditor on the same.

• Threat the creditor with plans of bankruptcy:
Approach the creditor in a manner that he is convinced about the fact, that you have got very little money and are on the verge of bankruptcy. Talk to them as if it is their last chance to come to a settlement. Automatically they will be alarmed. After all if you file bankruptcy they will get nothing. But if you get trapped into fresh debts, you might not be able to get rid of debts through bankruptcy.

• Good records are of great help:
Last but not the least, keep good records while settling your debts. This can prove to be a major factor in differentiating between good and bad debt settlement.