Choosing a Full and Final Settlement Offer to Get Out of Debt
A full and final settlement involves receiving a lump sum of cash, that you receive to repay your creditors.
This lump sum can be obtained by selling one, or a few, of your assets, which may include property, a vehicle, or any other type of asset you might own.
If you have enough money in your assets, a full and final settlement offer will allow you to repay all the money you owe, and in doing so, resolve your problems and help you become debt-free.
If, however, the lump sum you possess, can’t cover your outstanding debts, you are in the position to make a full and final settlement offer, in which you will be able to offer a lump sum to your creditors, in return for them agreeing to write off the rest of your debt.
You can utilize this method by making settlement offers to each one of your debts, in which you share the lump sum generated, among all your creditors, should they agree to your payment terms.
How does it work?
The first thing you’ll be required to do is to make an offer to your creditors, upon which you will send them your offer in writing. If the lump sum you have concluded by selling your assets, turns out to be 75% or more of your debt in total, you should offer every creditor 75% of the total amount you owe them.
During this stage, you should ensure that your creditors confirm to your terms by writing, before repaying them the promised amount.
You should also keep a record of these letters for up to six years after paying the amount agreed upon, to your creditors.
In some cases, creditors might not come to terms with accepting the negotiated amount and refuse to settle for anything less than the full amount. If accepted, however, you should send a proof of payment to each creditor, as well as keep a copy for yourself, for added evidence of your effort in paying your creditors back.
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