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Know If You Owe
Receiving a statement from your creditors does not necessarily mean that you have a debt. Ensure that you send a debt validation letter to your creditors to make sure that the debt belongs to you. The validation letter should include your signature and the sales receipt of your purchases. Make sure that you send the validation letter within one month after you have received your statement. If the creditors fail to prove that the debt is yours, they are required by law to stop contacting you concerning the debt.
Know If You Are Responsible
In some states, the law states that a creditor cannot ask you to pay back the money after a given period of time. Such debts are therefore referred to as zombie debts. Collection agencies buy these debts at a cheaper price from creditors and then send them to innocent customers. If you receive such a debt, first check with your state law to find out the length of time a creditor has to collect the debt. If you find out that it is indeed a zombie debt, send your creditors a letter to stop them from asking you to pay the debt. Be aware that you are not legally responsible for any zombie debts.
Know What Is In Your Credit Report
Use your credit report to find out the total amount of debt you owe. You can ask for a credit report through email or contacting one of the three credit reporting bureaus ( Experian, Equifax, TransUnion). Review the accounts to make sure that the figures indicated on them are correct. If you detect any error, contact the creditors immediately and have them make the necessary corrections. Check your credit reports to see if there are any accounts that have been sold to a collection agency. You should be fully aware of the situation on each account so you can better negotiate.
Know How Much You Owe
Gather all your statements and calculate the total amount of debt you have. Compare your figure to that which has been reported on your credit report. If what has been reported is wrong, contact the creditors and ask them to make corrections. The law says that you have a right to reject any incorrect bill. While the debt is still under investigation, pay the amount that you certain is correct. The creditor is prevented by law from reporting an incorrect amount to the credit bureaus until the corrections have been made.
Know How to Negotiate
If you are sure that the debt belongs to you, negotiate with your creditors by writing to them clearly stating how much you are willing to offer them. Make it clear that you want to settle the debt in full. The amount you offer should be less than what you can actually pay. This will give you room for more negotiation if you initial offer is rejected. If the creditor accepts your offer, make sure that it is written down so that there will not be conflicts in the future.