Can You Negotiate Your Own Debt Settlement?

Written By Mary Beth Eastman
Last updated February 21, 2020

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December 3, 2018

Simple. Thrifty. Living.

Like so many people, you’ve found yourself in debt. Of course, you’d like to settle it as soon as possible so you can start building a solid financial future.

Should you meet with your creditors on your own, though? Does it really make sense to avoid a professional settlement service such as Freedom Debt Relief or National Debt Relief? The answer depends on your abilities, your knowledge base and your level of stress tolerance.

First, not every collector will negotiate with you if you don’t have professional assistance when you begin the debt settlement process.

If some or all of your creditors agree to a discussion, you may reach a deal. You’d pay some of what you owe, perhaps in a series of installments, and a portion of your debt would be erased.

What are the benefits of handling these talks yourself? For one thing, you won’t have to pay a debt settlement company. Fees can be tough for people who are already struggling to make ends meet. If you want to use a debt relief company but don’t want to spend a lot, Accredited Debt Relief offers reasonable fees.

You can also set the terms yourself instead of deferring to someone else’s ideas. If you have a strong grasp of money matters and you’re good at negotiating, you’ll probably prefer being in the driver’s seat.

In addition, collectors may go easier on you if you represent yourself. Some of them might feel sympathy for you, especially if you seem upset. Moreover, if you bring an expert dealmaker, that professional might come across as forceful, stoking your creditors’ competitive juices. And, with a pro at your side, your creditors might assume that you owe lots of people. They might not be so willing to forgo their money just so you can give it to other parties.

However, unless you really know what you’re talking about, you can easily end up with an unfavorable arrangement if you manage your own debt settlement, making you wonder if it was worth it. Worse, your creditors could threaten legal action, and you might not know how to respond. And the final agreement could be packed with technicalities, jargon and fine print. In other words, it could be extremely difficult to understand, let alone abide by. Indeed, the entire experience might make you lose sleep for nights on end.

By contrast, professional debt settlers won’t be intimidated, and they’ll drive a hard, shrewd bargain. Plus, they may know some of your creditors personally, having worked with them before. Those connections can lead to better deals for you.

Also remember that debt relief companies cannot help fix your credit score. You can do that yourself as well, or you can find one of the best credit repair companies to help you. Here are our Credit Saint reviews and Sky Blue Credit Repair reviews, which look at two of the top credit repair services.

Always remember that bankruptcy would be very damaging to your credit history, and many creditors are willing to broker deals with cash-strapped individuals. Whether you should tackle those deliberations yourself can be a tricky decision. It ultimately comes down to how comfortable you are with stress and monetary minutia. No matter your decision, you can take steps now toward paying down debt for good.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

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