Negotiating with creditors can be a daunting thing, particularly as it’s almost always done when you desperately need to. Because debt will ultimately damage your financial stability, empty your bank account and seriously harm you ability to obtain any other credit, having to negotiate with creditors may seem like an impossible task. The stress that accompanies negotiating with creditors just adds to the difficulty of the task at hand.
With everything seemingly against you ever recovering from debt, you may feel as though there’s no way out. Thankfully, that’s not normally the case.You can take heart from the fact that your creditors’ main aim is to regain as much money as possible from their loans. There are some key factors and tips for negotiation that you should be aware of in order to keep your creditors on side.
Budget: Calculate how much money you expect to generate through income and lose in expenses for a month. This information will show you how much debt you can afford to pay off each month, and which bills you should take care of first. You’ll be able to tighten certain areas of your budget, which will really help you to free up more cash to pay off the debt even quicker.
Don’t Ignore Creditors’ Phone Calls: Although you may feel like burying your head in the sand will make the problems go away, it never does. All it leads to is frustrated creditors who believe you have no intention of paying off your debt and are more likely to pursue collection action against you.
Don’t Be a Pushover: Your original creditor is more likely to be easier to deal with than a collection agency. A collection agency may tell you they have made you their best offer, but they usually include a large collection fee in that offer, so don’t be afraid to provide a counter offer.
Get it in Writing: Word of mouth is worth nothing when dealing with debt problems. Everything must be agreed to in writing.
Request Fee Removal: Many creditors remove late fees, non-payment penalties, and any interest that has mounted up in exchange for the payment of what you owe. If it’s a one off rather than a regular occurrence, you’ll be more likely to succeed.
Request Better Rates: Long term relationships with your creditor can be beneficial, as they will want to keep you as a customer for as long as possible. If you’ve been consistent and reliable with your payments, it might be possible.