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Question
I have 8,400 dollars in unsecured credit that was attached to a business that I owned it was a s corporation. My question is can I settle this debit for say 40% of the balance without damaging my credit. The payments are up to date I just don"t want to pay the full amount.
In most cases your credit will be affected. Settlements are most beneficial when you are already late on payments or you have a bad debt since any settlement cannot damage the credit much more once you are seriously behind. I don't condone settlements for the purpose of just not paying the debt. I believe settlements are justified if you cannot afford to pay monthly but have resources available. That said, getting out of debt is more of a priority for me than protecting the credit. You can always re-establish your credit. Not that credit is not important but carrying a large debt load can deplete resources.
As for settling for 40%, this is a negotiable item. Some will agree to 40%, some will push for higher percentage. You have to justify the settlement to the creditor. They wont just forgive the debt. You must be in a hardship or they must see it as a potential loss.
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Answers by Expert:
Michael Brotherton
Expertise
Consumer/Debtor Rights Advocate. Mike Brotherton is a negotiator with over 30 years experience in consumer lending and collections. Mike has 30 years in the credit and collections industry as a former loan officer, debt collector and manager of two finance companies over several years. Mike is well versed in Loss Mitigation practices and the legal collection process. He has helped literally thousands of people over many years overcome serious financial problems such as foreclosure, creditor lawsuits and abuse by debt collectors. For more information about resolving your "financial emergency" visit www.financialemergency.com. FinancialEmergency.com is a consumer web site which actively promotes Fair Debt Collection Practices and other consumer protection laws. We teach DEBTOR RIGHTS and enforcement of those rights. The more informed you are of your rights and the credit collections practices of creditors the more peace you can have dealing with your FINANCIAL EMERGENCY. Most financial problems are fairly common and as such have some very common solutions. The key is understanding your rights in the collection process and how to enforce them if need be. Primary business- Debtor Rights Advocacy and Debt Mitigation relating to foreclosure, creditor lawsuits, and other serious financial problems. www.financialemergency.com (copy and paste in browser).
Experience
Over 40 years combined experience negotiating disputes and resolving financial issues related to consumer debt, corporate issues and mortgage modifications.
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