Settle Your Debt Excerpt

Nov 5, 2015 by

Settle Your Debt in 10 Easy StepsToday I’m sharing an excerpt from “Settle Your Debt in 10 Easy Steps“, volume 4 of my 5-volume Simple Guides series. Many don’t realize that debt settlement is a perfectly legitimate strategy for fully resolving an overdue debt—for good! And you can settle a debt yourself, no need to pay an overpriced settlement service. If you’re inspired to read more, click on the link above or at the end of the excerpt.

And if you’d like to read any Simple Guide but cannot afford the modest price, I’ll consider emailing you a free digital copy if you send me a note and explain your circumstances. Really!

“Settle Your Debt in 10 Easy Steps” Excerpt:

Takeaways: When to Try Debt Settlement

These conditions will improve the odds a creditor will be willing to settle a debt:

  • The original creditor sold the debt to a collection agency.
  • The collection agency has been working for many months to get money out of you.
  • You have not made any recent payments to the collection agency on the debt. (In other words, you have not given the agency any reason to hope you might pay in full.)
  • You have either ignored the collection agency’s calls and letters, or you have consistently told agents on the phone that you have no money and you cannot pay the debt and you do not expect ever to be able to pay the debt.

To Learn More

  • To better understand when and why creditors “charge off” and sell debts to collection agencies, read the short article “Charged Off Debts”.
  • Did you know you could unintentionally re-set the statute of limitations clock on a past due debt to zero, and that some debt collectors specialize in tricking debtors into making this mistake? Read the article “Handle Old Debts Carefully” to understand statutes of limitation and overdue debts.

Step-by-Step Deb Settlement

Is the prospect of making a debt go away by paying a lot less than you owe through a settlement negotiation exciting you? Great! Getting out from underneath a past due debt can be a giant relief and hugely liberating.

Before we start on the 10 Steps, here is one piece of advice: do not hire a debt settlement company. The financial world seems to attract lots of mostly sleazy operators, and that includes many debt settlement companies. If you need convincing, go to the Federal Trade Commission’s website ( or the Consumer Financial Protection Bureau’s site ( and do a search on “debt settlement”. The bottom line on many debt settlement companies is that fees are high and often, or effectively, non-refundable. Many customers see no debts settled after hiring a debt settlement company.

But even if a debt settlement company can settle your debt, then so can you. Let’s get started!

Step 1: Establish Your Mindset: You Have Power!

Do not be intimidated by the debt collection agency. You have power too! Why? You may never pay your debt at all! That may not sound like a position of power, but remember: the collection agency purchased your debt. It loses money if you pay nothing, and the collectors working on your case get zero commission.

If your collection agency believes that it may end up getting nothing from you, accepting 50%, 40%, or even 20% of the total balance today, instead of investing time and money over many future months or years trying (and maybe ultimately failing) to collect 100% of the debt starts to sound appealing to the agency.

Your hand may be strengthened if at the appropriate time (discussed in Step 4) you let the collection agency know that, along with debt settlement, you’re also looking into bankruptcy as an option to fix your debt challenges. Most debts can be discharged—that’s the legal term for wiped away completely, forever—through a Chapter 7 bankruptcy. If the debt you are aiming to settle were discharged in bankruptcy, the collection agency is out of luck, for good, and it knows that. In that sense, bankruptcy—or the credible threat of bankruptcy—is your trump card.

Takeaways: You Have Power!

  • You may never pay anything toward the debt.
  • You may file bankruptcy and ask the court to wipe out your debt.

To Learn More

  • Read the short article “Does Bankruptcy Cure Debt?” to learn more about the types of debts that can and cannot be discharged through bankruptcy.

To learn more about how you can easily settle a debt and be done with it once and for all, click the image below!

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