3 Key Steps in Debt Settlement Process - By: J.J. Yong

What is your New Year Resolution? Turning into a new leaf? When you are knee deep in debt, what must you do to get a way out? If debt settlement is your solution, you are advised to kick off your plan immediately. If you are not clear about this process, here is a simple guide for you. In general, there are only 3 main steps you need to take in order to go through the debt reduction process.

Step 1: Stop Making Payment

If you have made up your mind to try to settle your debts on your own, you are advised to stop paying on your accounts. You can take the initiative to contact your creditors directly to tell them about the situations that are making it difficult for you to pay off your debts. Be frank with them. Inform them about the hardship you are facing and propose to settle your debt with a reduced amount.

Step 2: Negotiate

Get yourself emotionally prepared to negotiate with your creditors. At the same time, get yourself financially ready too. Make sure you have some fund in your account. The fund is in fact your negotiation chip. Deal with the creditors and offer them a settlement amount which you can afford to pay. If the creditors are not willing to accept your offer, don't give up easily. Try again in a few months.

Step 3: Get settlement agreement

After a few offers and counter offers, you will finally come to the conclusion. You are reminded to get a formal settlement agreement in writing from your creditors before making the payment. Once your account has been settled, you must make sure that your credit report is reported as "paid as agreed" by your creditors to the credit bureaus.

Last but not the least; although there are only 3 steps you need to take in this particular process, the duration taken to complete this is around 2 years. Don't expect miracle. Be patient and determined. You will definitely get out of debt successfully.

About the Author

For more information about debt settlement solutions and debt settlement companies, visit DebtSettlementPoint.com.

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