How to Negotiate Your Debt With Creditors and Debt Collectors

Negotiating with your creditors or debt collectors sounds hard, but it’s not as hard as you think. If you prepare yourself with the right information, you can successfully negotiate better interest rate and payments with your credit card issuers and even debt collectors.

Preparing for the Negotiation

Figure out how much you can pay, write it down. If you write down the maximum amount you can afford to pay, you’re less likely to get sucked into a higher payment that you can’t afford.

Be ready to compromise. Your creditors and debt collectors want as much money from you as possible, so be prepared for a little back and forth on the negotiation amounts.

Have a backup plan in mind. Know what you’ll do if the negotiation doesn’t turn out in your favor. Knowing you have a viable backup plan can boost your confidence during the negotiations.
Give yourself a pep talk. Before you pick up the phone, give yourself some encouragement. If you’re nervous or afraid, the creditor will detect it and will be more likely to say “no.”

Think of all the possible answers. If you play out the possible scenarios before you make the call, you’re less likely to be surprised when you don’t get the answer you want.

 

 

Negotiation Tips

Ask for what you want. When you speak with your creditor, be upfront about what you’re looking for. Don’t beat around the bush. Simply state your offer and wait for the creditor to respond.

Don’t argue. No matter what the creditor or debt collector says to you, it’s important that you not argue with them. Engaging in an argument is the best way to get your offer refused.

Be polite. Courtesy is the best policy when you’re asking for something from creditors and debt collectors. Keep a pleasant tone in your voice throughout the conversation and respond kindly at all times.

Explain your situation, but don’t over explain. The creditor will probably need some convincing before they’ll lower your rate or payment amount. Give a brief overview of your financial standing, but avoid going into too much detail.

Tell the creditor how much you can pay. Rather than ask the creditor for a lower payment or settlement amount, just them know what you can afford to pay.

What Should You Have

Before you make the phone call, there are a few key things you should have.

• The creditors phone number
• Your account number
• The amount you can pay right now, today. If you’re negotiating a settlement amount, you need to be prepared to pay it soon after the agreement has been made.
• Access to a fax machine. If you and the creditor can reach a settlement agreement, you will need to get it in writing before you can make a payment. A fax machine will allow you to quickly send or receive a copy of the agreement.
• A traceable way to pay the creditor – like a personal check or cashier’s check. A check is easier to track and confirm than other types of payments like a credit card or money order.

You can negotiate with your creditors, even if you’ve never made negotiations before. A little confidence will go a long way in getting the terms or payments you desire.