Credit negotiations are a great tool for anyone looking to resolve their debts directly with creditors and regain control over their finances. However, most people enter the process unprepared and not knowing what to ask for. When seeking to negotiate your debts, plan ahead and know what plan you want to follow to resolve your debts.
Picking A Plan
There are several ways to negotiate your debts with creditors. One option is a lump-sum settlement plan, in which you agree to repay an amount less than you owe in a single payment. While this can be a great way to quickly get out of debt for less, most people experiencing trouble with their debts cannot afford to choose this option.
You may also want to negotiate a workout agreement, in which you agree to follow a structured repayment schedule in exchange for the creditor lowering the interest rate on the account or waiving any penalty fees. This is generally a good option for those who can afford to maintain a payment schedule based on their budget, but can require a lot of negotiation before the creditor agrees.
If you cannot afford to follow a repayment schedule, you can request a forbearance plan. This plan allows you to have temporary relief from payment requirements, which is generally up to six months depending on the creditor. This plan is reserved for those who are experiencing a temporary financial hardship and are wanting to avoid bankruptcy.