I have just sold some real estate and I would like to can I negotiate to reduce the balances of my (unsecured and secured) loans BEFORE I pay them off? Is this possible?
Creditors agreeing to accept less than the full balance of what you owe them, when they have not been paid for 90 plus days, becomes increasingly appealing to them. But many creditors are going to be the most likely to settle with you, for a better rate, or at all, when you are a couple months more behind than you are now.
Settling with your creditors does not come without concerns. Some immediate ones are:
Assume you can negotiate with every one of your creditors for a 50% savings (though your savings estimate could be better). Do you have access to that amount of money in a short period of time? Because you are already 3 months behind, if it is 90 days more you need from today, you are in good shape to negotiate your settlements at the earliest stages of collection.
If you cannot pull together all of the money needed to settle all of your past due accounts, how long will you need to come up with the amount needed? If you are going to need more time after you are considered 6 months past due, than you will want to strategize who you will settle with in the near term, and who you can settle with later on, and after you have more time to put the money you need together.
You can outline your creditors, the balances on each account, and how much money you will have available to settle in the next 2 to 3 months in the comments below. I can use that information to offer feedback about settlement percentages to target, and when, if you are interested in doing the settlement work on your own.
Please post your responses in the comments below to reach me.
Michael Bovee founded CRN, a unique company offering debt negotiation education and services, in 2004. Bovee has been contributing articles and free reader feedback on this site for several years.
Michael is a debt industry professional who has volunteered his time to help answer reader questions.
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