“Go against your instincts and proactively contact your debt creditors to take control of your best outcomes.”
• How To Negotiate With Creditors, 5 Important Tips: important dos and don’ts (hint: don’t lose your cool).• Pre-Contact Checklist: how to get ready to contact your debt creditors.• Finalizing Negotiations: the steps to take to protect your interests and confirm your creditor solutions.When you have unmanageable debt, the last people you want to talk to are your debt creditors—the credit card companies, department stores, computer manufacturers, gasoline companies, etc.—who are breathing down your neck to make your payments. Ignoring the phone calls, e-mails, texts and letters from your debt creditors does no good and can lead to suits, garnishments and further damage of your credit score.
How To Negotiate With Creditors, 5 Important Tips:
You need to make an about-face and contact your creditors (I know, it goes against every instinct you have right now.) An honest, civil phone call is the best means of communication. Here are 5 tips on dealing with your debt creditors:1.) Don’t send them a cease and desist letter. Original creditors can contact you whenever they want. If they can’t get in touch with you to work out a payment arrangement, there is the possibility they will take your file straight into legal.
2.) Be honest with them. Explain why you can’t pay your bills.
3.) With collection agencies, never accept the first settlement offer they send you.
4.) Let collection agencies know that you have other accounts that you need to pay, and the person who will give you the best deal is getting paid this month.
5.) Make the debt collector your friend. They’re used to people yelling and swearing at them. If you’re nice, you might get a better deal.
Pre-Contact Checklist
You need to be organized before contacting your debt creditors. Here’s a checklist to help you prepare:• Preliminary creditor list: make a chart of all your creditors with the following information:• Creditor name• Your account number• Account balance• Payment due date• Minimum payment amount• Amount of any overdue payments• Creditor contacts: add creditor contacts to your creditor list as you learn this information. Be ready to update this information if you are directed to new people or departments. Refer to the latest contacts for future communication.• Budget: for each creditor, calculate exact figures that you can pay either in renegotiated monthly payments or settlements, depending on your chosen strategy.• Priorities: choose the creditors you want to contact first based the size of account balance, monthly payment and/or interest rate.
Making Contact
By proactively reaching out over the phone to creditors, you’re showing initiative and a willingness to reach a mutually agreeable resolution. As stated in the above tips, don’t lose your cool, even if the person on the other line is cold, nasty, sarcastic, etc. Mentally prepare yourself for the call with a promise to keep your demeanor agreeable, knowing that it’s the way to achieve your best outcome.
During the call, ask for verification of your account status and amounts owed in immediate/overdue payments and principal. Be honest about the financial situation that has made it hard for you to keep current on the account. Let the creditor know about all the accounts you’re dealing with so they have a grasp of your financial situation and an incentive to come to an agreement to get “ahead of the pack.”
Confirm procedures to negotiate payments or payoffs and repeat them to the creditor representative to make sure you’ve understood everything. Make notes of all conversations and add these details to your creditors chart.
Finalizing Negotiations
Agreements on altered payments or settlements will have to be in writing. In the information age, an e-mail may be sufficient for some creditors; however, a certified letter from you to the creditor may still be the most thorough approach. Confirm and communicate agreements between you and your creditors and keep a record of all such correspondence.Future Communication
If you can’t uphold your negotiated payments or settlement, communicate with your creditors immediately. Determine the creditor’s standard course of action under these conditions and follow it. Maintain communication to uphold your interests and forestall more severe consequences including suits and garnishments.
Get in touch with your creditor right away if you receive mistaken communication from them that you’ve not contacted them, not sought new terms/conditions, and/or are not upholding your agreements. Correct the creditor in your response (politely) and seek new communication confirming your actions and compliance.
