[Text: Settling Debt with your Creditor] Hi there. This is Michael Bovee
with ConsumerRecoveryNetwork.com here on our Debt Bytes YouTube Channel and I’m going to talk
some more about debt settlement, the first stage of debt settlement which is dealing
with your original creditors. You can target settlements with your creditors.
Most settlements tend to get down over the years with debt collectors and outside
third party agencies that your creditors will hire or debt buyers who risk their
own money you know trying to get you to pay where your creditor couldn’t.
Often enough the best deals, the best reduction of the balance and the biggest
benefit to you is going to be settling with your original creditor.
It works a certain way. Here is what your targets are.
When you fall behind, you can’t pay, you know your creditors are going to call.
You typically want to engage in conversation with them and in fact your
negotiations with your original creditor will happen over the phone.
You write them a letter and offer some kind of settlement and you are just not
going to get a response. That is not how it works. You do have to pick up the phone.
I know it weighs a ton. You can get used to the process and ease
into the whole negotiation process with your creditor by being proactive.
Instead of answering all those calls and being annoyed by those calls they
are going to happen, get over it. You make a call, okay so be proactive.
Spend maybe as many as 3 to 5 minutes a month per creditor being proactive
staging this settlement effort. So in month one you have got 5 creditors,
let’s say you spend 20 to 25 minutes, talking with your creditors and telling
them what is going on with you. You don’t have to go into great amount of
detail, but something that has happened for you to be unable to pay your bills.
What was that? Keep it brief 1 to 2 sentences.
Hi, this is Michael. I know I am late.
It is not my intention to not be able to pay you, but this is going on in my life.
I have got a reduction in hours and my wife left her job and now we are down to
one income and that has impacted my ability to keep up with everybody.
I am sorry that means you are not getting paid. I got a few pans in the fire as
soon as something shakes lose. I intended to get caught up with you.
That is it, pretty simple. You are not going to be able to get
a settlement out of your creditor in the first month of delinquency nor the second month.
More often than that, not on the third month. That changes in month 4, 5, and 6 depending on
who your creditor is and their internal policies for operating lower balance payoffs.
They start to get reasonable around month 5. In fact your best opportunity to settle
with some of the largest banks out there, credit card issuers is going to be right
before you are exactly 180 days behind. There is a reason for that.
It is kind of technical. I will just briefly tell you it has to do
with how they have to account for losses on their books.
There is an accounting phrase. The term is charge off, and it is
used interchangeably with credit reporting and things like that, but it really is just
an accounting term and that is what banks have to follow.
They have to account for the loss after 180 consecutive days of none payment.
They can do it earlier. They don’t because it is bad news.
They have to share bad news with shareholders. At Wall Street so predominantly you have
a window of opportunity to settle with your original creditor between day 1 of
being late and 180 days of being late. In month 5 is where you are going to find the
best opportunities you have had dialogued with your creditor each month.
You have saved up money, you have tapped other resources, loaned
from family, sold off an unused item and you got cash, you need to be able
to target the right amount for each bank. We talk about all that at Consumer
Recovery Network.com. In fact, up here on the screen I have got
our DIY debt settlement page up where we talk about how you can deal with your creditors.
If you have questions, we are right here on this channel on this page.
Post us, we monitor all the activity on our YouTube channel and on this video and every video.
So engage in conversation here. You can go to our website use the ask
CRN feature in the upper right corner. In fact there is an 800 number up there
that you can call any time and talk with one of our specialist for free about your situation.
So I look forward to speaking to you on the next video where we are going
to talk about settling debt with debt collectors and we also look forward
to helping you through any one of these mediums that we talked about today.