When is the best time to try to negotiate your debts? In life timing is everything. The same can be said for debt settlement and debt negotiation programs. If you try to negotiate to soon and you wont get anywhere and if you negotiate to late, you may end up in court or needing the services of a bankruptcy attorney.

How do I know when it is the right time to settle my debts?

If you are current and try to negotiate your debts your creditor will probably laugh at you. They have no reason to settle your debt if you are still current. You would need to be a few months delinquent before a creditor would start to take you seriously. If you are current, they have no reason to believe that you cannot pay them back.

What is a charge off?

Once your original creditor gives up on trying to collect from you they will sell the uncollected debt to a collection agency. This is where your nightmare will start. Some collection agencies are relentless and will call you constantly to try to get money from you. They will call you at work, they will call your neighbors and even your family to try and find you for repayment. The have no problem harassing or embarrassing you to try and get paid.

What do I do if I get sued by a creditor?

Believe it or not, a creditor really does not want to have to go to court if they can avoid it. They may make it sound like they are ready to go at the drop of a hat. The truth is that it is expensive for them to go to court. Even if the creditor can obtain a judgment, there is no guarantee that they can collect. If they are able to garnish your wages, you can just move to a new job and they have to start the process all over again.

The last thing I would recommend is to read the fair debt collection practices act. This will give you information on what a creditor or collection agency can do or not do when trying to collect a debt. If they are out of line you can let them know that. A bill collector can be fined up to $1000 per offense or violation. If they know that you know the rules they will probably back off more.

This information is of general interest only. Should you require legal advice seek out the services of a professional or attorney.