Debt Negotiation: How to Raise Settlement Cash
Debt negotiation and credit consolidation can be serious possibilities of relief for people who have fallen too far behind in their debt and need to get out from under it all. Settlement of current debts with lenders involves working out a deal that pays off part of a debt right away in return for being forgiven the remainder. The lender gets some money back instead of nothing if the person goes into bankruptcy, and the borrower gets relief from debt that would otherwise force bankruptcy as a remaining option. However, for a settlement or credit consolidation to work, the borrower usually needs to be able to pay the settled partial amount immediately. That can be a bit hard if finding cash flow in the first place is already difficult.
However, there are a couple of ways to generate quick cash right away to take advantage of a pending settlement:
- Reducing spending. If a borrower can identify a couple of areas that he can do without for a little while, the saved expense may generate some of the ready cash needed to effect a settlement. It may involve delaying monthly costs leisure activities, subscriptions, discretionary spending, or general shopping. Whatever the case, if the dollars can be spare for a while, it can reap big benefits.
- Refinancing. This option was common up until the real estate crash, but if a homeowner has significant equity in a home, a cash-out refinancing can produce significant cash very quickly. The refinancing replaces the old home mortgage with a new one that adds the cash payment to the new loan amount. The homeowner can then use the ready cash to pay off the settlement payment.
- Second mortgages. Similar to refinancing, the second mortgage also uses the home to produce cash. Again, equity is needed, but if it’s available a lender can provide a second loan using the house as collateral. Again, the funds can then provide immediate cash for payment needs.
- Tax refunds. Although they only happen once a year, an income tax refund can provide a liability-free pot of cash that can make significant dents in debt. This is money that usually has no other commitments against it, so a recipient can direct the whole refund amount to a settlement without hurting any funding needed for other bills or cost of living.
- Selling property. Everybody has some kind of property or collectible that can be liquidated for cash. Whether it be through a garage sale or an online auction site, people typically have the ability to sell things for cash. While it may only produce a few hundred dollars at most, it has no commitments and can make the difference in quickly raising needed cash.
Article Source: http://www.articlefield.com
Processing your request, Please wait....
