Money Crashers: Debt Settlement Negotiation

Here's a new Money Crashers on a topic I hope most of you don't have to deal with: debt settlement.

I've written articles before about paying off debt, but this piece is for folks who don't see a way to do that — who can barely keep up with the monthly payments, let alone increase them. It's for people who have already missed multiple payments and are now dreading calls from debt collectors. People, in short, who are in a very bad situation.

One way out of this situation is debt settlement: persuading creditors to discharge your debt in exchange for a lump-sum payment that's less than you actually owe. This isn't a magic bullet, since you have to come up with that lump sum and persuade creditors to accept it, and the discharged debt will harm your credit rating. But it's easier to recover from than bankruptcy.

This article discusses the pros and cons of debt settlement, other alternatives to consider before trying to settle your debt, and strategies for negotiating with creditors. If you're lucky, you'll never need this information — but if you ever do, it's better to know your options ahead of time.

Debt Settlement Negotiation – Do-It-Yourself Guide to Beat the Creditors