Debt Negotiation: DO’s and DON’Ts


Credit company representatives have been trained to do a specific job and they do it all day, every day. They will employ tactics necessary to wrestle every bit of money they can out of you. And, in the process, many of them can get quite nasty about it. Every now and then, you might get someone who is polite and courteous, if so consider yourself lucky. In any event, read on for tips on how to best negotiate a debt settlement.

First, you must always remember to stay calm. If you don’t stay calm, everything else is going to be inordinately more difficult than it should be. Before engaging in any conversation with a credit company agent, breathe deeply and clear your mind of any distractions. Find a quiet place to talk and make sure you have time to negotiate, rushing the process means you risk committing a mistake. Remember, a company will use all means of threats and intimidation to get their money back. The most drastic end a credit company can seek is to sue you for their money, at which point a judge will order you to pay up. Telling people this, often has a desired effect, i.e. they promise to pay the money whether they can or cannot. Of course, going to court and being ordered to pay up may seem like a frightening prospect, but just remember, only a small percentage of these situations actually see the inside of a courtroom. Always bear that in mind and remember the most important rule: stay calm.

The next thing you need to understand is what you can and cannot do. You are calm and you are in control, but that doesn’t mean you should start smooth talking and making outrageous promises. Be honest and open. Even if you can only afford $20/month, tell them and make sure you stay firm. If the company starts talking you into paying more and you agree to pay more and then you cannot, it’s still your fault. Only you really know how much you can pay, so stand your ground and then by all means, once an agreement is struck, stick to it. The creditor probably already thinks you are untrustworthy and you know you aren’t, but breaking promises isn’t going to help matters. Breaking promises will only make them angry and cause them to ramp up efforts to collect.

Speaking of escalation, odds are the first person you speak with at a credit company is rarely going to be qualified to negotiate your account. Usually the first tier of representatives you talk to is reserved for those meant to lowbrow and intimidate. Cut to the chase and ask to speak with a manager or supervisor. You need someone who is (a) qualified to negotiate and (b) equipped to execute decisions others can’t. If a representative tells you a manager isn’t available, politely thank them for their time, tell them you’ll call back at another time and hang up. When you do get in touch with a manager, explain clearly and calmly how your situation breaks down and how much you can afford to pay. Don’t be afraid to lowball them at first. For example if you can only afford $20/month, offer $10. They will undoubtedly come back with a higher counter offer but stay calm and in control. Always remember, you have what they want, their money.

Finally, it’s been said before, but it always bears repeating: get it in writing. You’ve now forged an agreement with the credit company, you both have verbally agreed to it but that’s hardly a comfort when you proceed as agreed and a month later the company wants to know where the rest of their money is. Never strike a deal without getting a hard copy. And no matter what, never give anyone direct access to your bank account.


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