How to Negotiate Your Debt

You don’t need the help of someone else to get rid of that pesky debt that’s been haunting you for years now. Get to work on negotiating your debt yourself.

First, establish a budget that works best for you

You’re confident, a good negotiator, steadfast in your ways and a real thorn in the side of your credit card company, right? No? You mean, you just make your minimum monthly payments every month and don’t ask any questions? Chances are, you’re like most Americans and simply don’t know that you have the right and the opportunity to negotiate your debt with any creditor at any time if you so choose. But before you do, you need to make sure you have your finances in order. The key to negotiating debt with anyone—whether it be a large credit card company or just the guy down the block that you owe a few bucks to—is to go into the process prepared. Know how much money you earn every month, approximately how much you spend, how much debt you’re carrying and why lowering your debt is important to you. The truth is that anyone looking to collect money from you is probably willing to negotiate or accept a little less in order to receive their money back quickly. But you need to know your own budget and why negotiating will help both you and the creditor in the long run.

Working the phone lines (and the mailbox!) with debt

Now, just because you need debt negotiation or simply just want it to save a few bucks, you still need to be willing to put in the time and effort to go out there and see results. Typically, if you’re negotiating with any sort of creditor, you’ll want to start by drafting up a letter and/or placing a phone call to inquire into the sorts of debt negotiation or forgiveness that the company offers. Some credit card companies offer you the opportunity to negotiate your debt if it means that they will receive repayment from you more quickly without them actually losing money. Draft a letter or make a phone call to your creditor, explain your well thought out situation and ask about possible negotiation options. See if you qualify. Be prepared to answer questions concerning your financial state and the future that you foresee for yourself. Have a plan and confidently go in and execute it. Remember, this is a negotiation, so be prepared to give and take throughout the process. You may have to, say, offer to pay more every month in order to lower your credit card interest rate. But ask plenty of questions and find out how both sides will be benefiting from any possible solutions. Don’t rush into an agreement too quickly and you could save yourself a bundle of cash!

Watch your debt drift away quickly!

Now that you’ve made the proper calls, sent out your negotiation letter and gotten a response, plan accordingly. If you successfully negotiated your debt, congratulations! Work hard to keep yourself out of debt. You’ll be glad you did. If, for whatever reason, you were unsuccessful, don’t be frustrated! Keep working to find another way to negotiate your debt. Chances are, someone out there (someone trustworthy, of course!) will be willing to help you out. You just need to stay focused and keep working until the right debt negotiation terms come around. You’ll be thrilled when they do!