how do I settle my debts?

by Julie
(San Clemente CA)

If a relative is willing to lend you money to pay your debt to creditors at a reduced amount what is the best way to present this to the creditors? What is the best approach to take to get the debt reduced as much as possible? Do you then just send them a check for the agreed amount and is there something you should ask for in writing to protect you from the debtors coming back to you at a later date? Is there wording I should ask for that releases me from any future deficiency?

Comments for how do I settle my debts?

Click here to add your own comments

Aug 30, 2010
credit card settlement
by: Mary & Gerri


It's great that you have a relative willing to help you put this behind you.

The goal in debt settlement is to come to an agreement that works for you and your creditors. I don't know enough about the details of your situation to tell you what you could aim for, but I can tell you that you are right to insist on getting something in writing before you send payment. Do not authorize a creditor to take money out of your account (unless you have a separate account you are using just for those settlements), and do not settle unless you have something in writing from the creditor/collector clearly stating the terms of the settlement and clearly stating that your payment will be considered payment in full.

You didn't mention how many creditors you have, how much you owe etc. But if you have multiple creditors or you owe any one creditor thousands of dollars, it might not hurt to at least get some coaching around DIY debt settlement. The one advantage settlement firms have that most consumers don't, is that they know who is settling and for how much. They also know which creditors tend to sue. (We just wrote a blog post about this as it pertains to Capital One.)

You may want to listen to our debt settlement podcast to get a better idea of how this process works.

Click here to add your own comments

Return to Copy of Debt Collection Questions.

Learn how debt collection laws can help you!
This website does not provide legal advice.
All information is for educational purposes only.
Copyright 2007 - 2016 by Mary Reed and Gerri Detweiler.
All rights reserved.