How To Settle Debt Without Destroying Your Credit Rating
Imagine this scenario, you attempt to make it on your own and try to start your own small business. You’ve dreamed all your life of running your own business and you went for it. You and your wife charged all the business expenses to your credit cards and you may have even taken out a second mortgage. The business was your dream but other people did not get it like you did and your sales were not what you expected or what you needed to pay your bills. After many sleepless nights and fights with your wife, the decision was made to shut down the business. Now you are stuck with tens of thousands of credit card bills and the collectors are starting to call more often. What are you to do?
You could either file bankruptcy, try to get another source of income just to meet the minimum payments, or your can settle your debts with your credit card companies and get quicker debt relief at a lower cost than bankruptcy would provide.
So how to settle debt? Basically, you can show them your financial situation, show them that you do not have very many assets to give them. You can show them that in the near future, you will not be able to make your minimum payments and you may be forced to file bankruptcy to get debt relief. You can write them letters showing your personal income and balance sheets. If you are already behind on your payments, they may be more willing to settle as they know the longer you go without making your payments, the more likely it becomes they will never get anything. This makes them more willing to settle and avoid you going into bankruptcy.
Settling your debts can result in savings of 40-60% off your total balances. This can provide much needed credit card debt relief and put more money in your pocket each month and all without destroying your credit rating. This way you can learn from your prior mistakes and try and start another business, this time with more experience and a better chance of success.
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