Debt settlement Do's and Don'ts - FOX 26 News | MyFoxHouston

Debt settlement Do's and Don'ts

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Agreeing to pay your creditors less than you owe should be avoided if at all possible, but if it turns out that debt settlement is the best option for you, the good news is that many creditors are willing to negotiate.  Consider some of these do's and don'ts before you proceed

 

Tip #1 – Don't wait, be proactive

  • Don't wait until charged off
  • Creates options & may salvage credit score
  • Creditors want a positive outcome.

 

Tip #2 – Don't overlook the consequences

  • Settlement can create a taxable event
  • Negative impact on credit report
  • Message sent to future creditors

 

Tip #3 – Do be prepared to show your financial cards    

  • Creditors want documentation before settling 
  • Convincing proof of hardship.
  • Resistant to concessions just for a deal.

 

Tip #4 – Don't make a promise you can't keep

  • Set payments you can manage.
  • No unrealistic settlement plan.
  • Avoid defaulting and collections

 

Tip #5 – Do make sure the matter is settled

  • Does settlement show properly on credit report. 
  • Will settlement payments be reported to bureaus
  • Make sure collections activity stops  
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