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Hiddencreditrepairsecrets.com PresentsSettlement Negotiations - How to Settle Your Debt

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Winning a debt settlement negotiation is about knowledge and skill. If youknow what to say and how to say it, you can get any creditor or collection agency to cut your delinquent bill or bills in half. Before you contact the creditor, know how you want to negotiate your credit rating, what should be in the agreement, how you should pay them, what happens if you default on the agreement, how to stop the lender if they try to collect the dif ference, and how is the IRS involved.

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Settlement negotiations - How do I negotiate my credit rating?For exchange of your payment, ask thecreditor to delete the negative item onyour report. If you cant get a deletion, go for a paid as agreed, current account or unrated status. Avoid negative listings like account closed, paid, paid charge of f, settled or repossession. In addition, you wantpaid in full with no further collection on this account indicated in your agreement. If the creditor does not agree with any of your requests, dont pay them.

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Settlement negotiations - What should I include in the agreement?First, have a lawyer review your agreement, and make sure all of your terms are in the agreement before sending any money. You can draw up the settlement or wait for the creditorto send it to you. Send your agreement out andwait for the lender or collection agency to sign it before sending it back. Ask the financial institution to send the agreement by fax followed by a letter.

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Settlement negotiations - What about paying them? Once the lender signs the agreement, you can send the payment with a copy of the settlement agreement by a wire transfer, quick collect, overnight mail or Fed Ex. Please do not use a check because the creditor will obtain your checking information and start taking out payments.Instead, use a cashiers check, money order, or a prepaid credit card with the exact amount. Make sure you keep and store your receipts in a safe place.

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Settlement negotiations - What if Idont keep my agreement? What can happen?If you dont meet your obligation, the creditor will reinstate your originalterms and add late fees and over the limit fees. In addition, your interestrates will go up and you can possibly even be sued.

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Settlement negotiations - What if they try to collect the dif ference in my settlement? In some states, these actions are illegal, and you will have to write the creditor and let themknow that. Other states allow collectors to come after you for the dif ference. If this is the case, you will find that the creditor has written or stamped the words "under protest" or "without prejudice" on your check.

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Settlement negotiations - How is the IRS involved in the debt settlement? When a creditor settles a debt for less thanwhats owed, they have forgiven the dif ferenceon what you owed. The creditor must report any monies forgiven over $600 to the IRS for tax purposes. The creditor will also send you a 1099-c indicating the amount you saved in the settlement. Because you got a deal, the IRS considers the money as a gain to you and therefore, income. By law, you are required to pay taxes on this gain.

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Concluding, always stay in control when it comes to negotiations, so that you can achieve your ultimate goal, which is protecting your credit rating and savingmoney. Now that you are empowered with more information, go out there, and take action.

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