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Best Strategies For Resolving
Old Debts; Settlement options
by
Mark Brinker
If you have some outstanding debts that need to
be cleaned up once and for all, here are the 2 best strategies to
use:
- VOD (Validation
Of Debt)
- DN (Debt Negotiation a/k/a Debt Settlement)
I'll explain each strategy in detail, then give
you some examples of when to use (and when not to use) each strategy.
Validation Of Debt
As outlined in the FDCPA
(Fair Debt Collection Practices Act), if a bill collector is pursuing
you for an unpaid debt, you have the right to see written proof
that the alleged debt actually exists, hence the term “validation
of debt”. And until that bill collector can produce the
requested information to support their claim, they must halt
their collection efforts against you. It’s that simple.
Here are some examples where you
should invoke your right to see some documentation from the bill
collector:
1. Dispute. If you receive a collection notice
on an old outstanding debt that you believe you might owe, but the
collection notice lists (A) an incorrect account number or (B) the
claim total is way more than what truly might be owed, ask the bill
collector to validate the debt.
Mistakes and sloppy record keeping happen all the time. Therefore,
I would want to see the supporting paperwork before I offer any
money to the bill collector on a possible settlement.
2. The Debt Is Very Old. Even if you know that
you owe the money, but the debt is pretty old
(say, 2 years or more) you might want to ask the bill collector
to produce the documentation because you just might get lucky. Remember,
if they can't produce the documentation to validate the debt, they
must close their case against you and stop all collection efforts.
(see here to determine if your debt may be expired)
However, use the debt validation process wisely.
If you know you owe the money and you believe that there is a very
good chance that they will be able to produce the supporting documentation,
you might want to just go straight to negotiating a settlement before
any additional animosity is created. In other words, if a bill collector
goes to the trouble of gathering all the paperwork to validate your
claim, do you think they'll be in much of a "mood" to
offer you a decent settlement at that point.
Special Note: If a debt is still being handled
by the original creditor such as Chase or Citibank, for example,
don't waste your time asking them to validate the debt because there
is a 99.9% chance that they will be able to produce full supporting
documentation. The older a debt is, the more likely there
will be errors, and that's the best time to request supporting documentation
from a bill collector.
Debt Negotiation (a/k/a Debt Settlement)
Here are two situations where I believe attempting
a negotiated settlement is the way to go.
1. The bill collector has successfully validated
the debt. OK, they've got you. They've produced full supporting
documentation to validate the debt. Now you need to quickly shift
your focus to negotiating a settlement for less than full balance
or working out a reasonable payment plan for the full balance. If
you have the skill and confidence to go head to head with the bill
collector, you can certainly do this yourself. On the other hand,
if you've never done this before, you might be better off to have
a professional debt negotiator do this for you.
2. Personal integrity. Rather than messing around
with the whole "debt validation process" when you know
you owe the money and there really is no dispute, how about just
admitting that you owe the money and go straight for a settlement!
You will almost always end up with better results this way. Personally,
I have a lot of respect for people that are mature enough to say,
"Hey, I owe the money, I'm sorry about what happened, let's
reach a settlement that works for everyone and let's get on with
life."
Hope this helps. If you have any additional questions
or need more information, please feel free to visit our website
at www.hoffmanbrinker.com
About the Author
Mark Brinker is the president of Hoffman,
Brinker & Roberts, Inc. Since 1995, Mr. Brinker has helped countless
individuals and small business owners obtain millions of dollars
in debt relief by negotiating settlements for less than full balance
with creditors, collection agencies and attorneys. In addition to
his debt settlement practice, Mr. Brinker also teaches attorneys
and financial professionals the art and science of debt negotiation.
For more information, please visit www.hoffmanbrinker.com
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