Getting out of debt is a high priority for many people. Most people who are in financial trouble with too much debt did not get their by design. Medical bills, a lost job, and credit card companies changing the rules of the game all may contribute to financial woes. If companies would work as hard with good customers that see major problems coming over the horizon as they do with those who are on the brink of bankruptcy, many bankruptcies could be avoided.

The problem is that these companies want to get every nickel possible. By waiting until the borrower can no longer pay on the debt before offering a settlement, they believe that it will maximize the amount of money that will be received. In many cases, the client will grab for the settlement rather than risk bankruptcy.

Unfortunately, this means that the borrower must endure huge negatives on their credit report for multiple delinquencies. The good news is that settlements do not do terrible damage to your credit. Companies figure that you did pay the bill in a fashion acceptable to borrower and lender.

With the possibility of losing all of the outstanding balance, banks and companies are ready to deal. A little of something is better than a lot of nothing. When the late notices have stacked to a sufficient height, start calling the collection departments and agencies. Make them aware that they are not the only fish in the pond and that bankruptcy is looming if settlements cannot be reached.

This process is the same as negotiating to buy a car or house. Ask what they are willing to offer. This will not be the bottom number. Anything above 50% of the amount is too high if the debt is three or more years old and unsecured. Offer them back about half of what they suggest. You should be able to end up at about 35% to 40% of the loan amount with accumulated late fees waived, also.

Once a settlement is reached, get the name and address of the individual and follow up with a letter detailing the agreement. Keep a copy of the letter and note the date, time, and any pertinent information on your copy.

If you find that this is not working for you, your negotiating skills are probably weak. Track down a public debt counselor that works for free. These people are usually sharks that get paid by the credit card companies and banks for their services. If the negotiator is worth having, huge slabs of debt should be peeled away. Ask them for references ahead of time because not

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