How To Settle Debts- Dealing With The Original Creditor

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The original creditor is the credit card company or lending institution that isued your loan or credit card. If your account is not in collections, then the company you want to deal with is the original creditor. If your account has been turned over to collections, then the original creditor will not even deal with you- they've taken their IRS deduction and have assigned or sold the debt to a collection agency.

Before you attempt to settle, you should do everything possible to prevent your debts from going to a collection agency.

Simply put, it is usually easier to negotiate with the original creditor. Avoid having an account turned over to a collection agency at all cost.

It varies from creditor to creditor, but most credit card companies allow 120 days to 210 days before an account is charged off. You are definitely in the danger zone after 120 days. After a debt is charged off, typically, the account is turned over to collections. While the account is considered a "past due" account and may be approaching the charge-ff stage, it is often possible to prevent the charge-off by at least making one payment, along with all late fees. This holds the account from going further past due.

Once the normal payment is being paid regularly, even though the account may remain past due, regular monthly payments may prevent further delinquency and prevent charge-off. Even better, would be to pay the normal montly payment plus a little more in order to begin to catch up the past due payments. If a larger than normal payment is made, it may eventually catch up the past due amount and eventually cause the account to become current.

Many creditors will allow you to keep your accounts open or even to reopen them if you bring your accounts current. They also have programs where you can make 3 payments which are larger than the minimum in order to catch up and bring your account current. You may want to consider these options.

Now, did you know that you can also reduce the original amount of debt you currently owe with the original creditor by simply asking for it! that's right, call the customer service department of your credit card an ask to speak to a manager and explain to him that you could not pay the whole balance, but before they transfer the account to a collections agency and sell it for pennies on the dollar, make them an offer to pay a portion of the debt.

You might have to go back and forth with the manager, but be firm and ask for what you truly could afford to pay.

About the Author:
Author: Evelio Areas

www.creditsecretsbiblehub.com

By the way, there is a very good company that teaches you exactly how debt settlement works and it shows you how to do it yourself, so you can have more control over your debts and save big money too.
They are the www.creditsecretsbiblehub.com

Check for yourself.



Article Originally Published On: http://www.articlesnatch.com


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