Lump Sum Settlement: Slash Debt by up to 50%?

When it comes to closing past-due lines of credit that are dragging your credit score through the mud, a lump sum settlement poses one of your best options. Creditors are often willing to slash your total amount owed by up to 50% in order to minimize the risk of having to turn your account over to a collection agency for non-payment. 2 major factors will influence the amount of your final settlement. First, your representation (or lack thereof) will play a major role in how much you pay. Second, your ability to pay creditors on the spot will greatly factor into how much they are willing to reduce your total principle owed. You would be wise to consider these factors at length before deciding how to proceed with your settlement negotiations.

Representation

Lending institutions deal with non-payment cases on a regular basis and as such, many have grown cold to the individual circumstances that land people in crushing debt. They typically have a standard procedure by which they deal with individual consumer debtors and a set reduction amount from which they are very hesitant to stray. For this reason, you would be wise to consider retaining professional representation when it comes time to negotiate settlements with your various lenders. Specialized lawyers or debt-relief teams offer a terrific resource when you are in need of representation. While these services come at a price, they could result in you saving a great deal of money in the long run.

Cash on Hand

Creditors will be more willing to reduce the total amount of monies owed if you are able to pay your lump sum settlement amount on the spot. One of the best ways to acquire the cash you need is by taking out a consolidation loan, which is a large sum borrowed in order to pay off all your creditors at one time. Once approved for a consolidation loan, you will have a great deal of leverage in negotiating settlements with financial institutions. Bottom line, lenders want the money owed to them as soon as possible. If you are able to give it to them immediately, they are likely to reduce your settlement by up to 50%.