Since the economic recession in the US, the small and the large business organizations are the worst-hit and most of the organizations are still trying to recover from the sluggish financial state. Debt can mar the growth of a business and therefore unless you take rock-solid steps to let go of your debt burden, you won’t be able to get back on the right financial track. Businesses are formed to generate revenue within the nation and boost the economy at the same time but when such business firms drown in debt, it becomes a burden for the nation’s economy. Although there are debt negotiation services that offer professional help to the financially distressed business firms, you can even save your dollars by negotiating your debts on your own. Are you aware of the steps that you have to take in order to pave your way out of debt through debt negotiation? If answered no, here are some tips that you might consider.
- Calculate the total debt amount: The foremost step to take is to calculate the total debt amount so that you know where you stand exactly. Take out all the documents and receipts of the financial account or the credit card accounts and make sure you don’t miss a single thing. Jot down the interest rates that you’re paying on each account, the total outstanding principal balance and the due dates on which you’re supposed to repay your debts.
- Checking your savings amount: No matter how sooner your principal balance is waived off by your creditors and lenders, you still require a solid savings account from which you can make the payments towards the remaining amount. Keep on saving a portion of the revenue that you earn so that you don’t have to take resort to the professional options for borrowing money and repaying them with the interest rates and the other fees. Don’t withdraw funds from your savings account unless you’re going through an emergency.
- Negotiate with your lenders: The most important step that you have to take as a business owner is to negotiate with your lenders on your own so that they know the financial hardship that is barring your business from making huge returns and make timely payments. Explain your present financial situation in a very humble manner so that they believe you and agree to waive off a certain portion off your outstanding principal balance.
- Write a debt negotiation letter: Draft a debt negotiation letter formally mentioning the reason behind the loan defaults, the total amount that you owe, the total amount that you can afford to pay back and your affordability. Maintain a formal, yet humble tone while writing the letter and try to accompany the letter with a business budget that can help prove your future success.
- Start making the payments: Once the creditors agree to waive off a portion from the principal balance, you should immediately start making the payments, either in a lump sum or through easy and affordable monthly payments.
So, when you wish to save your dollars by negotiating your debts on your own, you can take the above mentioned steps. Manage your finances and as soon as you’re debt free, start opting for credit repair as debt negotiation might hurt your financial records.