If you want to try and settle your credit card debts yourself, there is no need to understand all your state’s debt and tax laws. There are many free debt settlement letter samples available online and you can use these as a template to draft your own letter. But if you do find yourself getting overwhelmed by the legal language and jargon, it may be better to consult debt settlement attorneys and let them handle your case.
A credit card debt settlement letter can be used to negotiate for better terms with your creditors. It shows that you are willing to pay off your debts, but you want to reduce your payments especially for the rollover interest fees. In any debt elimination plans, the debt settlement letter is sent to your creditors such as banks, card companies or consumer loan lenders to discuss about reducing the outstanding debts or suspending the interest fees.
The bargaining chip you have at hand is that your creditors are concerned you choose to file for bankruptcy instead of paying back a $2500 dollar unsecured loan. Thus, they may decide to accept reduced debts as a compromise to ensure they can still get back their money. The payment plan can be in the form of a reduced monthly payment plan that can be afforded by your current level of income and schedule to pay off the debt completely within 3 to 5 years. Usually, you need to bargain hard and make several counter offers to your creditors before an agreement on the debt settlement amount can be made.
Many people have managed to reduced their existing debts by writing debt settlement letters themselves, without paying for expensive fees to debt counseling companies. Since banks and lenders make money through interest fees, they rather get back the money they lent out instead of having to write off loans to defaulters or borrowers that choose to file bankruptcy because they cannot meet the monthly payments.
When banks receive your credit card debt settlement letter, they are willing to enter negotiations and try to make you pay in full. However, remember that they will rather grant loan forbearance and lose some profits compared to making a loss on the entire loan principal. The latter usually happens when debtors are pushed too hard into financial hardships and fed up with no way out of their debts. Banks and lenders will not want you to file bankruptcy, so write them a debt settlement letter for getting out of debts which works on student loans, car loans, and other unsecured personal loans with bad credit.
There is no need for you to re-invent a debt settlement letter when there are many free samples for you to draft a letter to eliminate your debts. When you have very serious debts or a lot of different creditors, it may be better to engage a debt settlement attorney to negotiate on your behalf and create an overall payment plan to satisfy them. Although you need to pay some consultation fees, these debt settlement attorneys are familiar with the legal and tax laws and are in a better position to help you bargain for the least amount of debts to pay back. You will save more than what the fees are worth.
Many people are angry with how credit card companies and private lenders for bad credit loans suck their money dry with the high interest rates on their debts and unsecured loans. When you find yourself having no money left after making the monthly debt payments, you need to do something drastic to eliminate debts fast or the credit card interests will keep increasing.
To write a valid debt settlement letter yourself to help eliminate debt, there are many free sample debt settlement letters for your reference. It is very easy to adapt a well written copy and add in your own information such as amount owed, creditor details etc.