- 1). Question the debt. Before you attempt to settle your debts, make sure you owe them. There are numerous cases of identity fraud reported, so if you question a debt or know you yourself did not incur this debt, request that the creditor validate that the debt is actually yours to pay.
- 2). Know your rights. When you compose your letter to your creditors, ask them to consider removing your negative debt from your credit report. Explain that according to the major credit bureaus, creditors must report only what they want to report. If you have the intention of paying your debt to them, they may be willing to help you by removing the negative information beforehand.
- 3). Be up front with them. If bankruptcy is something you have been considering, let them know this, but refrain from using a threatening tone. Let them know that you are still willing to pay them if they are willing to settle for a reduced amount. By telling them that you are considering bankruptcy, it may encourage them to work with you so that they don't lose out completely.
- 4). Make your offer once you have decided upon what is financially feasible for you. Explain that you can either pay X amount in a certain time frame or you can make a one-time payment of X amount of dollars. Also ask them to sign the letter if they are in agreement with your offer and send it back to you. This signed letter will be a measure of protection for you if they decide in the future they want to collect the remainder of the debt.
- 5). Request a letter of settlement from them, stating that you want a copy of the debt having been paid in full according to the terms of your agreement. You must send this to the credit bureaus to have it cleared from your records.
- 6). Check with the credit bureaus after 2 or 3 months of paying your debt in accordance with the agreement established between you and your creditor. Request a removal of the debt you have just paid. Include copies of the agreement between you and your creditor and the receipt from the money order or a copy of the check you sent the creditor, proving they have cashed it and received the payment you promised.
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