Top Debt Negotiation Tactics That Work

Trying to get out of debt requires a number of different methods.  For instance, you might want to take on a part-time job, increase your hours at work, follow a monthly budget and cut out any unnecessary spending.  These are all logical and typical things that a person does when they’re trying to pay off their bills.  However, a lot of people don’t realize that there are debt negotiation tactics you can use with your creditors to lower your balances and/or your interest rate.  Here are some top tips for paying your bills down quicker by using debt negotiation.

Get Your Ducks in a Row

The very first thing you need to do is get all of your ducks in a row by compiling all of your statements in one place.  You need to have everything put together so that you will know which creditors to contact first.  This might include your credit card statements, store cards and any other types of debt that you owe. The last thing you want to do is forget about a particular debt that you have.  This is why it’s so important to have all of your statements in one place so you know what you’re dealing with.

Ask for Settlements

Many people don’t realize that they can ask their credit card companies to settle their debt.  Rather than going through life with collectors calling your house, it makes more sense to settle the debt with your creditor directly.  You can call each of them and ask if they will settle for a lump-sum payment in a lower amount.  Many times, the creditor will cut the debt by 50% or more if you can make a lump-sum payment.  One great idea is to sell some items on eBay or have a garage sale so that you have a set amount of money.  Then call those creditors that you think will be willing to negotiate for the amount that you have.

Statute of Limitations

Another avenue to explore is what the statute of limitations is for your state.  Sometimes, you will have debt collectors calling you about a debt that you incurred many years ago.  These debts are passed around from one collector to another, and there is a statute of limitations on when they are allowed to collect the debt.  If the statute of limitations is drawing near, it makes sense to mention that the creditor so that they are more open and willing to settle the debt with you.

Keep Your Cool

One of the most important parts of the debt negotiation process is simply keeping your cool.  Don’t sound desperate and don’t be confrontational.  Remember that you are interested in having these people work with you, so be courteous and polite.  Keep all of your information nearby and organized.  The more details you have, the greater chance you have that the creditor will be willing to work with you. If you do decide to settle some of your debts, make sure that you get a letter from the creditor directly stating that the debt has been settled and wiped clean.  You also want to find out if they will be reporting those facts to the credit reporting agencies so that your score can be adjusted.