The dreaded “April 15” has come and gone. Are you getting a tax refund this year? Use it to settle your debts!
Here’s how it works:
- You prepare your taxes. (Oh, joy!)
- You notice you’re getting some refund. (For example, suppose it’s $1,000.)
- You have an old debt you’ve been unable to pay, and have fallen behind. (For example, suppose it’s about $4,000.)
- You mail your tax return (or e-file).
- You call the creditor about your debt. Using the suggested script in my book, How to Settle Debts Yourself, you engage the creditor and offer to settle the $4,000 debt for $1,000. You explain that you don’t have the money just yet, but should have it within a few weeks. You don’t make any firm promises but are willing to settle the debt and get it off their books, if they’re willing to make a written settlement offer for $1,000.
- They send you a written, firm offer to settle your debt for $1,000, within a time frame you can keep (make sure you have enough time to receive your refund!).
- You receive your refund. YOU DO NOT SPEND IT ON SOMETHING ELSE!
- You write a check, or get a cashier’s check, or use a money order and pay the creditor the $1,000 settlement within the time specified. Enclose a copy of the settlement offer with your payment.
- About 30 days later, you check your credit report to see if the debt is now showing as “paid” or “settled” on the report.
- If it is not, check again in 60 days. If it’s still not, you need to call the creditor and provide a copy of the cancelled check and the settlement offer. Persist until you get the debt off your credit report.
So there you have it. Negotiating your debts is a pretty straightforward process. You just need to tackle it head on, don’t give up, and keep your courage up. You’ll be on your way to success, and you’ll be getting those debts out of the way.
Good luck! And please let me know how you’re doing with this.