Top 3 mistakes consumers make in a debt settlement program.

1. Communication to creditors.

In the USA we all know we have the right to remain silent.  Did you know there is no requirement for you to speak with a creditor over the phone and provide them every single detail about your situation?  A great reason you contract a professional debt settlement or negotiation company is so they can do the talking for you; there is no requirement to tell a creditor you are using a debt relief company and I highly suggest you avoid providing your creditors with their name and number.  First you do not want to raise a big red flag about your situation.  Second every debt collector only wants money!  They do not want to call someone else when they have the responsible party on the phone.  There is nothing in it for them to call someone who didn’t create bill, isn’t responsible for the bill, or attempting to reduce the bill for you – again, they only want money from the person who created the debt and they will say anything to convince you that payment needs to be expedited to them immediately before further action.

There are many people who are absolutely frightened at the idea of someone calling them about money owed.  Many creditors use automated dialers to contact their delinquent clients and are often confused as telemarketers. You may think you can avoid these calls just by not answering them, but this will only compound your problem.  A creditor’s dialing system knows when you have picked up, if there was no answer or if they contacted you.  My advice is to answer the phone, get their information and very briefly let them know there’s been a financial hardship, you are unable to pay them today, and you will contact them when there are funds available to take care of the bill.  Thank the collector for calling you and terminate the call, it shouldn’t take more than a minute or two of your time.  Also by staying on the phone longer you may hear some questions or comments you can do without.  I believe doing this clearly demonstrates to your creditor an awareness of the situation and you are not going to let anyone else be in control. Remember this is your debt and you control the flow of conversation at all times, even when they call you at a bad time.

2. Ignoring a monthly budget.

We all know there are more than one or two life events that could land us in more debt than we care for.  Things happen such as a job loss, divorce, or living leveraged credit card lifestyle- financing everything from the necessities to weekend toys.  A debt settlement program is designed to get you out of debt as soon as possible, within your budget.  Debt settlement requires there to be a sacrifice in the usage of credit and spending in order to revive a savings habit. Debt settlement is only effective on an honest budget.  It will not work just because the monthly savings payment is less than your current monthly minimum payment; you must commit to spending less and staying focused on saving every cent to eliminate your credit card debt quickly.  I suggest eliminating the thought of “there’s never enough money to pay off my debts.”  Instead, think about where your money may be hiding; you may find a few small changes can be made to your budget or even just starting to follow one is really easier than trying to take on an extra job or selling everything owned.

3. Failing to keep in touch with the settlement coach and negotiations team.

Many consumers are not prepared for the upcoming challenges they face to eliminate their credit card debt.  The value in a debt settlement program is the encouragement and support provided by your team of experts; you need to be willing to call on the experts you chose to work with for the help needed. I understand it can be hard to ‘ask’ for help when facing financial difficulty, but failing to use your coach and support team in this process is the worst mistake to make.  Ideally the support team should contact you every other week and you should call them immediately when any questions arise; even minor details.  Understanding how to effectively work with your team of support will resolve any debt problem once and for all.

If you are in a program already hopefully you can avoid these common mistakes.  If you are wondering if debt settlement is right for you, please visit www.certifieddebtsettlement.com