Debt Consolidation and Debt Settlement For No Fee

There’s no shortage of companies that will charge you a fee to help you handle your debt. Debt consolidation and debt settlement are two examples of services that companies charge you for. Fortunately, these companies have no special powers. The services they charge to complete, you can do for yourself, for absolutely free.

How to Consolidate Your Debts

Debt consolidation allows you to combine all your debts into a single monthly payment that’s lower than your current payment. One way to combine all your debts is to transfer the balances to a single credit card. That way, your debts are all in one place. You’ll only make payments to that credit card. It’s best if the interest rate on your debt consolidation balance transfer credit card is at least lower than the average interest rate on your other credit cards. If you use a card with a low introductory interest rate, make sure you know when the interest rate will expire and what the normal interest rate will be.

Consolidating Debt With Bank Loans

You can also take out a debt consolidation loan from your bank. After you’re approved, one of two things will happen. Your bank might ask which debts you’d like pay with the consolidation loan. Then, the bank would disburse payments. Or, the bank will deposit the loan into your account and you’re responsible for making your debt payments. Ideally, the payment on your debt will be lower than the -combined payments you were making pre-consolidation loan. Many homeowners use a home equity loan as a debt consolidation loan. Be careful about doing this, though. If you default on your home equity loan, you risk losing your home.

How to Settle Your Own Debts

You can contact all your creditors individually and negotiate a settlement offer with them. Your debt settlement approach depends on whether you’re working with the original creditor or a debt collector. You can find out whether the original creditor is still handling your account by simply calling them. If they’ve turned the account over to a third-party debt collector, they’ll let you know. They can also give you the contact information for the collection agency handling the debt.

Settling With Original Creditors

Most of your original creditors will only settle your debt if you are more than 60 days late. When you speak with the creditor, let them know you’d like to pay the debt but are unable to pay the entire amount. Make an offer for a settlement. Don’t be unrealistic with your debt settlement offer, most creditors don’t go for anything less than 50% of the debt and they might even have an established settlement amount based on your level of delinquency. Make sure you keep a record of your calls, including date, time, person you spoke with, and details of the conversation. When you reach a settlement offer, be ready to pay. With original creditors, it’s typically ok to make payment by check or credit card over the phone. You can even use a cashier’s check or money order if you prefer.

Settling With Debt Collectors

You can typically settle a debt with a debt collector for much less than what you owe, but you have to be stricter with the details of the settlement. First, make sure you have the name, mailing address, and fax number of the collector. It’s better to communicate with debt collectors in writing. Even if you reach an agreement over the phone, be sure to get the agreement in writing before you ever make a payment. The older the debt, and the more times the debt has changed debt collector hands, the lower the settlement, you’ll be able to manage. Make a 25% offer. When you’ve gotten an agreement, it’s better to make payment with a money order or cashier’s check. Debt collectors have been known to make fraudulent charges using credit card and checking account information.

Here are a few resources to help you consolidate and settle your debts:

Major Credit Card Companies

Here is a list of major credit card companies. You can always call the number on the back of your credit card to reach your issuer’s customer service.

Creditor	Phone Number
Bank of America	1-800-732-9194
American Express	1-800-528-4800
World Financial Network National Bank	1-800-695-5316
Capital One	1-800-955-7070
Chase	1-800-432-3117
Providian	1-800-365-0011
First USA	1-877-999-3872
Discover	1-800-347-2683
HSBC Bank	1-800-975-4722

Major Debt Collection Agencies

Here is a list of major debt collection agencies. Be sure to confirm the number with any correspondence or phone message you receive from the collector.

Agency	Phone Number
Allied National	800-456-5770
Arrow Financial Services	636-281-3338
Asset Acceptance	586-446-7826
Asta Funding	516-431-5338
Cavalry Portfolio Services	866-434-2996
Collins Financial Services	800-570-5007
Encore Capital Group	858-560-2600
First Select Corporation	415-278-4407
JBC & Associates	800-507-8034
Oliphant Financial Corp	888-632-5111
OSI (Outsourcing Solutions Inc) Portfolio Services	678-474-4022
Phoenix Asset Acceptance	480-403-6400
Portfolio Recovery Associates	757-961-3533
RJM Acquisitions	516-714-1300
Sherman Acquisitions	888-665-0374
Unifund Group	888-489-8877