Consider debt negotiations which can be handled directly through an individual or through a 3rd party company, such as an attorney or credit counseling service. A growing number of people are finding it increasingly difficult to meet the minimum monthly obligations to all of their creditors. An individual in this position needs to take immediate action in order to prevent any damage (to their credit report.
If an individual decides to represent himself during negations there are a few things he should know. Understand who you are dealing with. If the account is extremely overdue it may have been turned over to a collection agency, otherwise you will be negotiating with the actual creditors. Always get an offer in writing since this can be offered as proof if there is ever a dispute later on. Realize that there is a difference between a settlement plan and a plan to completely repay your debts. A settlement is an agreement to pay only a portion of the debt.
Be honest, but explain the tough situation that you are in and provide as many details about your particular scenario as you feel comfortable. This can only help your chances but be aware that any write-off at or above $600 is considered income. This is income that is eligible to be taxed. If a settlement is agreed upon ask to have the negative remarks removed from your credit report. Follow through with any offers that you make and if you make a promise and fail to live up to it, they will be less likely to show any lenience. Be polite, but this does not mean that you should not be firm - but remember that you are essentially asking them for help.
Negotiations can be a tedious and unpleasant experience but they can all be worthwhile if the results allow you to take control of your debts and avoid filing for bankruptcy. Although it may leave some blemishes on your credit, it will point you down the road toward financial recovery. In the long run it can also be used as a learning experience and a strong motivator to maintain a healthy financial lifestyle.