3 Mistakes Made by Debt Negotiators

Dealing with debt negotiators is something that many people do when they want to settle their debt. They hire someone to negotiate a settlement with their creditors for them. While this can be beneficial in certain circumstances, these negotiators can make some mistakes along the way. Here are a few mistakes to watch out for when working with a debt negotiator. 

1. Settling Too Easily

Sometimes, a debt negotiator will come in and not get you the deal that you need. They start negotiating with a creditor and decide to go ahead and settle before they should. If they give in too early, it could end up costing you more money than you should have to pay. During the debt settlement process, the idea is to get the amount that you have to pay down as low as possible. If they do not take their time and negotiate properly, it could end up costing you dearly. 

2. Not Protecting Your Credit

Another big part of the debt settlement process is the impact that it has on your credit score. When you negotiate with a creditor, you want to make sure that your credit is taken care of. During the negotiation process, you should be able to ask the creditor to help your credit profile. Creditors are not obligated to report anything to the credit bureaus. Therefore, as part of the settlement, you could potentially ask them to remove any disparaging comments on your credit file. 

Sometimes during the process, the negotiator is so focused on the amount of money that they are saving you, they completely forget about the impact on your credit score. Make sure that your negotiator knows that protecting your credit is a huge priority for you. 

3. Not Getting Proof

When you are dealing with a creditor, you need to make sure that you get proof of the agreement that is made. Sometimes a debt negotiator will finish the negotiations and not actually get any proof of the deal that was made. For example, you might have a debt of $10,000 that you are trying to eliminate. The negotiator gets the company to agree to let you settle for $4500. They tell you that you have to make a lump sum payment of $4500 and they will cancel the remainder of the debt. It sounds like a great deal and you jump at the opportunity. You get your $4500 together and send it in without receiving any documents from the company. They take your payment, then they sell off the remainder of the debt to a collection agency. 

At that point, you have nothing in writing that says the debt would be canceled if you paid $4500. This means that legally, the other $5500 in debt is still valid. You may then have to continue paying the collection agency until the $5500 is paid off. However, if you knew this in advance, you would not have parted with your $4500 all at once. Make sure that your negotiator gets documentation of everything before you make a move. 

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