Debt negotiations are one way to resolve your debt troubles without the need for debt settlement or bankruptcy. However, not all negotiations are the same. Negotiations largely depend on who your creditor is and what type of debt you are attempting to negotiate. In general, secured debts versus unsecured debts require different negotiation strategies.
The problem with secured debts is that they have an asset secured as collateral against the loan. This means that the creditor has the right to repossess that asset if you default on your loan. The best way to pursue a debt negotiation with a secured debt is by contacting the creditor as soon as you miss a payment. Waiting too long to contact a creditor, or missing multiple payments on a secured debt, could result in liquidation of the asset and no chance at a negotiation.
When negotiating secured debts remember that you are not likely to obtain a reduction in the overall amount of debt owed. In order to keep the asset you will need to repay your debts. However, you may negotiate a reduced interest rate, a waiver of penalty fees or request an extended period of time to repay your loan debts.
Credit card negotiations are much easier to negotiate favorable terms for in the long run with creditors. Since there is no asset secured against the loan as collateral, creditors generally have very little recourse for collecting the debt. In general, you want to wait until you have missed at least two or more payments before contacting creditor to negotiate a deal. However, this does not mean that you cannot contact the creditor prior to missing payments to ask for extensions to your payment deadline. The idea is to show that you are experiencing a financial hardship, but not taking too much of a hit to your credit.
When negotiating unsecured debts ask for a reduction in the overall amount of debt owed based on what you can afford to pay. You may also negotiate a temporary suspension of payments or interest rate for a specified period of time.