Negotiating with your creditors is a direct way to reduce debt payments, but it’s not easy. Remember, their job is to collect money from people who haven’t paid. They don’t care about you or your problems – they only care about the money they’re owed. How can you be successful when negotiating with them?
- Most importantly: you should be trying to uncover your creditor’s bottom line. What is the minimum they’ll accept? It varies from situation to situation, but 50-70% is not out of the question.
- Do not agree to pay more than you can afford under any circumstances. You know your own financial situation better than your creditors do, and agreeing upon a settlement package that you can’t afford puts you in a very bad position.
- Do not be intimidated. You owe money, but you still have rights. Read the Fair Debt Collection Practices Act (FDCAP). Do not let them threaten or harass you.
- If you make a request that is denied, ask to speak to a supervisor.
- Negotiating can take days or even weeks. Try not to get discouraged.
- Your creditors will usually find a lump sum payment more attractive than a payment plan. Keep this in mind when negotiating.
Finally, when you come to an agreement with your creditors, make sure that every detail is put into writing, then signed and dated by both parties.