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Getting Debt Forgiveness from your Creditors By Paul Ritz If you feel as though you are drowning in a sea of debt, it is a good idea to look into debt forgiveness programs. It is better to ask for debt relief when you realise that you have a problem rather than to wait until the creditors are hounding you because your payments are late.

What Does a Debt Relief Company Do? These companies will take a look at your overall financial situation, discuss an affordable payment plan with you and then negotiate with your creditors to try and bring the repayment program into being. You then pay the agreed monthly amount to the company and they pass this on to your creditors when a settlement is reached. They cannot guarantee that your creditors will accept the proposal but, if they are a good company, they will make sure that the proposal is realistic and thus likely to be accepted by your creditors. They basically ask your creditors to forgive some of your debt or negotiate a lower interest rate or fees. This has to work for the creditors as well as for you. Creditors will consider the proposal if it is reasonable as they want their money back and know that if you declare bankruptcy, their chances of getting the money diminish. Note that the proposal needs to be realistic – that is why you have to deal with a professional arbiter and not some fly-by-night organisation.

What to Do? The first step is to gather all your financial info together – make up a list of all your creditors, the monthly repayments and the outstanding balance. Then list all your living expenses for the month and also whatever income comes in. Go through these carefully and see if there are any expenses that you can cut back on. You are probably going to have to make some hard decisions – you will probably have to cut down your standard of living. Any sacrifices you make now though will help you to secure your family’s financial future – isn’t a bit of hard living now worth future peace of mind? Then sit and work out exactly how much you can afford to pay back in debt every month.

Find a Debt Management Company Your next step is to look for a debt management company. You want to look for a company that has a good reputation and that is well-established. Look at the services the company offers - you do not want a company that specialises in only one area, but one that can counsel you on different options. Perhaps debt forgiveness is not going to work for you, dealing with a company with experience in other debt relief areas will be able to offer a solution for you in particular. This is one place where you don’t want a “one size fits all” solution.


A sterling reputation is important as these people are going to represent you. If the company has a bad reputation, their proposals to your creditors will not carry as much weight and your creditors may look on you as less than reputable. That the company is well established is important because it shows that they have the staying power and experience to stay in business. This kind of negotiation takes a good deal of knowledge and experience in order to ensure a successful outcome. Make sure that you choose a company that has that kind of knowledge and experience. Ideally you should be looking for a company that is an accredited member of a professional organisation such as the American Fair Credit Council or AFCC. Accreditation is important because it means that the company has been vetted by on outside organization. Professional associations require that their members adhere to certain norms and conventions – usually in an effort to improve the industry as a whole. It should be remembered that the lack of regulation in the debt relief industry means that there are some really bad companies out there whose interest is only earning money. These organizations will generally steer clear of joining professional associations.

What can they do for you? Find out what the company can do for you – do they offer any money-back guarantees for their services? (I.e. If they are unable to get your creditors to come to an agreement, will they refund your money?) A lot of companies will make their fees a percentage of the money that they save you. That way, if you win, they win. Do they offer any kind of money management counselling? A good company will be interested in trying to help you prevent this problem again by teaching you how to manage your money more carefully in future. Do they offer any kind of bankruptcy assistance? Some companies will help to refund you some of your money towards hiring a bankruptcy attorney should the debt relief program prove unmanageable. What kind of services do they offer once the program is up and running? How easy will it be for you to get updates on how well you are progressing? Some companies offer you access to your account online to make things easier for you. Keeping track of your progress is important – it can help to keep you motivated during the lengthy process of paying off your debt – it is encouraging to be able to see that your debt is actually going down.

Once you Have Settled on a Company You need to set up an appointment with a consultant and take all the relevant paperwork with you. Take along your list of income and expenses and also your account details with each creditor. Once the repayment program is in place, your only responsibility is to make sure that you keep up your end of the deal and keep the payments up to date.


1-888-703-4948 www.nationaldebtrelief.com


Getting debt forgiveness from your creditors