Often, strategies like cutting expenses, boosting income, and sticking to a strict budget may not suffice to tackle financial challenges. Hence, it becomes crucial to engage with creditors to negotiate a more manageable debt repayment plan.
DebtBusters employs a structured approach to negotiate effectively with creditors on behalf of its clients. Lets understand how Debt Busters negotiates with creditors for their clients.
The Comprehensive Negotiation Process by DebtBusters
1. Creation of a Detailed Debt list:
DebtBusters initiates the negotiation journey by meticulously compiling an exhaustive list of the client's debts. For each debt, the following information is documented to facilitate discussions with creditors:
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- Creditor's Name
- Monthly Payment Obligation
- Interest Rate Applicable
- Outstanding Balance
- Secured or Unsecured Nature of the Debt
2. Strategic Prioritisation of Debts:
Recognising the varying degrees of impact associated with different debts, DebtBusters strategically prioritises negotiations.
High-priority debts, characterized by severe repercussions for non-payment, include:
- Mortgage or Bond
- Arrear Rent Payments
- Auto Loans
- Utility Arrears
- Court-Mandated Child Support
- Outstanding Tax Liabilities
- Student Loans
Priority is accorded to these debts to mitigate the risk of asset seizure or legal action. Conversely, negotiations for lower priority debts, predominantly unsecured ones like credit card debt, commence by addressing the debt with the highest interest rate. When creditors agree to debt settlement at reduced amounts, clients can advocate for updating their credit report to reflect current status and expunge negative entries.
3. Thorough Review or Creation of Budget:
DebtBusters conducts an extensive evaluation of the client's existing budget or collaborates in crafting a new one if necessary. This meticulous step ensures that negotiated repayment arrangements align harmoniously with the client's financial capacity and obligations.
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4. Compilation of Financial Documentation:
Anticipating creditor requests for substantiating financial information, DebtBusters diligently gathers essential documents, including:
- Household Budget Analysis
- Debt Inventory
- Inventory of Assets with Estimated Valuations
- Loan Agreements
Moreover, clients are encouraged to consider potential co-signers in advance, given that some creditors may mandate co-signing as a condition for new agreements. Co-signers assume responsibility for payments should the client default.
5. Formalisation of Agreements:
Upon successful negotiation with a creditor, DebtBusters ensures that all terms are meticulously documented and formalized.
The agreement encompasses:
- Length of the Agreement
- Deadlines for Payments
- Agreed-upon Payment Amounts
- Applicable Interest Rates
- Fee Structure, including Circumstances for Fee Payment
- Commitments Extended by the Creditor, such as fee waivers or debt forgiveness
- Conditions for Default and the Consequent Ramifications
Formalising agreements in writing ensure transparency and legal clarity for both parties, mitigating the likelihood of disputes or misinterpretations.
