While some people have find it effective to pursue certain aspects of debt management, it never hurts to enter credit negotiations first. However, when it comes to successfully negotiating your debts, there are a few general rules to follow.
The most important step is to contact your creditor before you default or miss a payment. Although this may not always be possible, timing is everything. Waiting too late to negotiate will limit your power in the negotiations.
Next, find out how much you can afford to pay. You want to be in control of the negotiations as much as possible and having a plan laid out for your debt repayment will help you secure the best deal.
Last, be prepared to explain your financial situation. Creditors need to know why you can’t afford to repay your debts or need assistance. You don’t have to get too personal, but provide them with enough information to understand your situation.
A common mistake people make is accumulating large amounts of debt just before attempting to negotiate their debts. Remember that your creditor can see your purchase and payment history, so you won’t be hiding much. Keep your purchases minimal and take a break from buying before you attempt to negotiate your debts.
Never threaten your creditor or use abusive language in your negotiations. If you aren’t getting the answer you are looking for, ask to speak to a supervisor or someone else in the company.
Also, don’t purposely miss a payment in hopes of negotiating a better deal. Debt negotiations are tricky and require you to prove your financial hardship, but also your ability to maintain a modified payment schedule. Strategic default is never a good idea when attempting to work with creditors.