DIY Settlement Main Idea??????

What?? :shock:

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Dear Luv2laugh,

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Thank you so much Pheonix for your informative response. I was thinking I wanted to try to do debt settlement myself instead of going w/ a company, would I still use a trust for different reasons? Do you not recommend Do It Yourself Debt settlement?

Tweety, from what I understand this is something you do when you are already not being able to pay your debt. It is def. dramatic and seems wrought with stress and possibly a lot more complicated problems such as garnishment of wages. It is appealing to me right now because my credit score is already pretty poor, my husband and I have no savings, make decent money, but never see ANY of it (we are buying food and gas by donating plasma and filling out offers on GPT sites as well as selling off our posessions on craiglist & amazon), we also never are able to make all our payments and due to a necessity to pay some bill, etc. are negative in our accounts. In this situation, something such as debt settlement is extremely appealing 1) because right now we are paying the bank in fees and extra charges instaed of on the actual debt mainly, with this plan we will actually be able to pay off debt and 2) I will not be negative in my checkings account. Right now, I may go negative from a $3 fee and then be charged $34.00 3x in a row. I am paying the bank hundreds of dollars in this kind of way for unexpected agencies that take something out of my account. honestly, it is appealing to stop shelling out money to the bank for NOTHING, even when they are at fault for not telling me about something. did that help a bit?

I have actually decided to go thru the debt settlement process on my own as well. I stopped making payments starting May 1st. The reason being was that my credit card bills and other monthly bills reached a point where it was slowly eating away at my already small savings/emergency fund. I fully expect my credit score to take a major hit and one that will take several years to repair. I chose to do this on my own because I believe I could do it and did not want to pay someone to do it for me. I figure this way I am the only one responsible and it will give me an incentive to change my fiscal habits.

If using a debt settlement company you more than likely will be paying an upfront fee or settlement fee to go along with a monthly fee. All this depends on the debt settlement company, they all do it a different way. This was one of the main reasons I decided to do it myself. Your paying for a service so that is less money you have to settle with. Will I be able to get the best settlement rates out there, probably not because I have no experience doing it, but hopefully it will prove to be a valuable learning experience.

Usually with a debt settlement company you pay them an arranged amount each month which was mentioned in a previous post. They put the money in a third party account or trust. There are a few which allow you to keep the money and save it on your own. This is what you will need to do if you plan to do debt settlement on your own. My suggestion is to find the highest online savings account you can and set up an account. Once set up link it to your primary checking account. Next you need to determine how much you are going to be able to set side each month into your savings account. The more aggressive you are saving money to settle with the better off the whole process will be.

From what I have gathered about settlement process it can be quite stressful. A lot of it is negotiating with creditors which is why it can be referred to as debt negotiation. Be prepared to have your phone ringing off the hook for the next several months. It will be your choice whether or not you choose to answer the calls or not. If you do decide to talk with our creditors, which I will plan to do on a limited basis, just try to be as professional and courteous as possible. For me it's hard to get angry or upset at someone who is just trying to do their job. If someone is being rude or unprofessional just excuse yourself and hang up. They will try to intimidate you so having a basic knowledge of your rights would help greatly. If you find people who are friendly and easy to talk with I would suggest getting their contact info so you can contact them in the future if needed. Any small relationships you can build may prove beneficial when it comes time to settle.

As for when you should try to start the settling process I'm not 100% sure. Most won't even consider settling until your account is 90 days past due. Others won't consider it until 150 days. My plan will be to create a folder or log on each creditor to record interactions and store documents. Being organized and well prepared will only benefit you in this process.

What can you settle for? There is no clear cut answer to that question. There are too many factors that can determine what ultimately you end up settling for. I'll be happy to settle for 50% to 60% as long as it means I'll be debt free in the end. Will I strive for a lower amount, absolutely and my goal is 40% to 45%. In preparing my folders I'll set an ideal target percent for each creditor and try my best to stick to it. Keep in mind the longer you hold out the better the offer you are likely to receive. Keeping in mind that you'll most likely get the best offer right before they decide to charge off the account. Be aware however that the prospect of being sued by a creditor is a very real possibility the longer you are delinquent.

Well this turned out a little longer than I expected. I hope this was a little helpful and I wish you luck. If you do decide to do it yourself please post about your experiences or start a blog. I plan to start one this weekend and look forward to sharing my experiences with others.

I started the above post this morning, but some things at work came up and wasn't able to finish it until now. Didn't realize that I got logged out before I submitted it.

Dear Luv2laugh,

Thanks for your appreciation of my post.

You can always go for debt negotiation or Settlement by yourself. It can save you the fees charged by the debt settlement company. But you may face some serious problems in Self Debt Settlement: -
1. The first and foremost problem you may face is to write a Debt Settlement/Negotiation Letter for effective outcome.
2. You may face stiff challenge to convince your creditors for lowering the outstanding debt you owe them. In such negotiations you may not be able to negotiate with your creditors as efficiently as the professionals of a Debt settlement firm.

After getting a glimpse of your financial position from your last post it seems to me that you urgently need debt relief. But before selecting any program, why don't you get a Free Consultation from
???????this community????????s financial coach (9am to 6pm) http://www.debtconsolidationcare.com/debtcclivehelp/index.html

???????Or call the Toll free phone number 800-601-1579

???????Or put a message to this community????????s debt consultant, Aaron Fetty.

???????Or fax your financial problem to the number 800-601-1579

Regards,
Phoenix

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We considered doing settlement ourselves but we felt that we had too much debt. More than anything, we wanted to avoid any lawsuits and so far, we have. I think if someone has the stomach for it and not too much debt, it can be done on your own. This website, along with others, give great information on what to expect. It is nerve-wracking and it will hurt your credit but sometimes, there is no other choice.

I started this journey of debt settlement last December. I knew I was in trouble and I was almost depleted of all my assets trying to stay ahead so I just stopped paying. I then borrowed from my 401k, saved money, sold personal possessions and got some money from my family. I formed a plan early on of how much I would need to settle all debts by June of this year. I started with a total of 45% of my total debts. To date I have been able to settle with BOA at 38%, Chase at 45%, Citi at 38%, Discover at 50% and I have just two cards left that I will settle with in June. I did all this myself and most of the creditors were very understanding and easy to work with. I did all my settlements by phone with the original creditors and before chargeoff. I had lost my income, maxed out the loans on my real estate (no equity) and was overextended and needed to borrow money to settle. It seemed that creditors want to know there is a true hardship before they settle and most will not even start with a good settlement until you are over 120 days late and near chargeoff. I have settled over $100,000 in debt now and still have about $27,000 left. I have made it my goal and budgeted and saved every dime I could - no fun for me in the last six months; just business taking care of this mess. i have found the process very stressful and have lost a lot of sleep over it, but it has all been worth it and soon I will can be credit card free - but my next issue, the IRS. I'm insolvent for about half of what I saved, the other half I have to come up with money, I think I will pay them what I can and go on an installment plan they offer at 8% interest. I should have them paid in two years.

The other good news, I think I have my house sold. There goes one house and a large mortgage. I will finally have some breathing room.