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Business Debt/Settling debt with original creditor

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Expert: - 2/11/2009


Question
I have an old debt that I have been paying on and off for the past 7 years.  When my husband lost his job, I fell behind on payments.  I was able to talk to them and worked out a lower payment but the interest rate is very high.  I have been paying on time for the past two years but I still am not able to put a dent in the amount I still owe which is approximately $5000.  I would like to negotiate a settlement to eliminate this debt but I only have about $2500 to offer.  I don't know whether to offer the $2500 as a settlement amount or let them make me an offer.  I also do not want this to hurt my credit score as my FICO score has been getting better.  I don't really know where to start.  I really need some good advice.  Thanks in advance.

Answer
Vanessa:
Thank you for your inquiry. I am sorry that your husband lost his employment which has no doubt made paying things that much harder. Depending upon who you owe ie. credit card vs. a SBA loan, you may be able to negotiate a lump sum settlement on your own. If the debt is unsecured as in the case of a credit card many creditors will discount given a hardship, however they don't usually do this until several payments are in arrears. If you legitimately are struggling to pay this, but do have some money to settle you need to decide how best to utilize your money. I can wont suggest that settlement is right for everyone, as it is not. The cost of "good credit" is being able to afford the amount you owe on the banks terms - always, and even then we can't always control how our overall credit rating might change, due to many factors. As you know few things in life give you the option having it both ways, and this is true of endeavoring in settlement. If you fall behind there will be some late reporting that might occur, and if a discounted amount is the resolution you agree to pay, settlements may be reported as something other than "paid as agreed". This is typically a brief derogatory, that once the debt is paid will enable you to improve your score (if it should in any way suffer), over time. Keeping current with your secured debts will help with this too. My suggestion is since this really is not a huge amount, see if you can get a friend or family member to lend you the rest of the $2500 and pay it off, then pay them back over time, it will save you from having to make that choice. I hope you find this helpful, and if so, please take a moment to provide a positive rating and feedback so others may benefit as well.

Respectfully,

Christine Janklow

Business Debt

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Christine Janklow

Expertise

As President of SettleSource,Inc. a business debt settlement firm, I invite you to inquire about all aspects of business debt solutions to best determine which may be most appropriate. If you have questions such as: What is debt settlement and how process provide debt relief to my business? What options are available to deal with my business debts? Is it possible for a business owner to negotiate their own settlements? Why is debt settlement preferable to filing a bankruptcy or debt consolidation? Why are creditors willing to provide settlements to a business? How will settling debts affect credit scores? or How to rebuild a business after debt is eliminated. Please ask it now! For more information regarding how debt settlement can help your business, please visit www.SettleSource.com and place your inquiry. Mention All Experts to have a confidential no cost consultation with Christine. If this is your business situation time may play a very important factor in getting matters resolved proactively before they have negative affects on the business.

Experience

My expertise is specific to providing business solutions that will have profound positive impacts on the financial health of businesses. I have 25 years experience as an entrepreneur and have developed national sales programs; strategic alliances; product development; marketing programs; business and turnaround plans and debt settlement programs all providing methods to improve the financial outlook for large and small businesses. In the area of commercial debt settlement I have over 10 years experience working with large and medium corporations and closely held businesses to enable successful debt reduction and turnaround. I am a professional debt arbitrator and have negotiated with major banking institutions as well as vendors, suppliers and other trade creditors.

Organizations
Provisors;Turnaround Management Association; Los Angeles area

Publications
Accounting Today; Web CPA; National Restauarant Association;Los Angeles Daily News; Today Magazine Monthly series of business articles entitled "Brand News."

Education/Credentials
Bachelor of Business Administration; Associate of Arts Merchandising

Past/Present Clients
American Airlines, American Express, Safeway Inc., New York Life, consumer products manufacturers; retailers, food service industry and other small businesses and service providers.

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