Tips for Negotiating with Creditors

You don't need to be ashamed of pursuing debt relief through negotiating with your creditors. The best laid plans of mice and men often go awry, and even people with plenty of fiscal responsibility end up in tough financial situations. The key to getting back on your feet is to pay off the debt and move on, and the best way to ensure a fair arrangement is by negotiating with creditors.

When negotiating with creditors, get it in writing.
Phone calls are nothing but a liability when negotiating with creditors, so do it by mail. Without an agreement in writing, you can't force the creditor to stick with their end of the bargain, and they may pursue you for additional payment even if you've agreed to settle the debt at a reduced rate. Additionally, creditors sometimes use your debt problems to bully you or force you into an agreement that you don't want, so confining your correspondence to writing reduces the possibility of dealing with harassment. When negotiating with creditors, always send correspondence via certified mail and request a return receipt so you can show that they've received your letters.

Take a realistic look at what you can afford.
A creditor may demand more than you can afford to pay. Before you begin negotiating with creditors, take a good look at your finances and determine what you can afford without creating further debt problems. There's no point in arranging debt relief for one debt problem, only to create a new one. Stick with your guns, and don't allow a creditor to bully you into paying more than you can afford.

Don't pay a penny until you're satisfied with the debt relief arrangement.
Once the creditor gets your money, you have absolutely no leverage to change the deal or add stipulations. When negotiating with creditors, get the deal you want before you pay. Debt relief isn't relief at all if you're paying too much or your credit report still shows a negative entry, so consider all the options and get the agreement ironed out in writing before you send any payment at all, even a partial payment or fee.

Try contacting the original creditor.
Collection agencies often inflate the value of your debt in order to earn a profit. When possible, try negotiating with the original creditor. The original creditor is often so happy to receive any payment that they may be willing to waive fees and interest entirely and collect only a portion of the debt. Try this option before working with a collection agency.

If possible, negotiate the debt off your credit report.
It's in your best interest to have the debt problems go away entirely, including from your credit report. Attempt to negotiate with the creditor to remove the debt from your credit report. Some creditors are unwilling to do this, so take it on a case-by-case basis. Remember, get it in writing!

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