Debt Negotiation The Right Way

When you are swamped with debt finding the right tool to get relief isn’t always easy. Once you do find an option you feel suits your financial needs, executing it can be even more stressful. One common debt management path people choose is debt negotiation. Negotiating with creditors is no easy task and many people find the process to be frustrating. However, there are a few ways to ensure you approach debt negotiations the right way and hopefully maximize your chances of successfully obtaining a deal.

Communication

Whether negotiating with the IRS or a credit card company, it is important to remember that they hold most of the power to negotiate. After all, your debts are your responsibility and a creditor is not legally obligated to negotiate with you. This is not to say that you have little power of influence. The most important aspect of debt negotiation is open communication. You need to maintain a consistent line of communication throughout the process in order to better navigate a deal. It is best to try and work with one person directly during the process, which means that you need to get their name and direct contact phone number. You have a far better chance of success when letting only one person handle your account.

Another important aspect of communication is your tone. Never be abusive or threatening with a creditor when trying to negotiate. Even if the creditor appears stubborn or unwilling to help, it is important that you keep your cool. It isn’t uncommon for one person to write a note in your account stating the nature of a conversation for other people within the company to see. If you attempt to speak with someone higher up after you have lost your temper, you may find just as much resistance as before. Remember that staying calm and offering a pleasant tone of voice is your best ally.

When attempting to negotiate a repayment plan with your creditor it is important that you are honest about your situation. You need to paint a picture of your financial situation to demonstrate your need for assistance with your debts. There is no need for extremely personal information or explanations, but it is important to explain why you cannot meet your debt payments as expected. If you have lost your job or suffered a medical illness, offer to provide documentation to the creditor to demonstrate your unexpected circumstances.

Proposal

A great tool that many people forget about in debt negotiations is to prepare a proposal before you talk with the creditor. Organize your finances and determine how much you can realistically pay each creditor per month. Write a letter explaining your financial situation and the proposed payment plan that suits your budget. You may also find better success if you offer to have your payments automatically drafted out of your account each month. Creditors appreciate such organization and dedication to debt payments, which will win you favor in their eyes.