Why Creditors Negotiate

: Chris Lee Law Firm

  Filed under: Credit Negotiations

protecting credit score

credit negotiationMost creditors will act tough and put up some resistance when it comes to negotiating debts. However, more often than not you can get them to play ball with a little persistence. Credit negotiations are not always easy, but you can successfully arrange a deal if you know how to pursue them correctly.

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Creditors are after one thing, their money. Not only are creditors working to recoup the money they lent you, but they are also trying to maximize profit. This means that they will do everything possible to obtain the money you owe plus make a little extra by way of interest and penalty fees.

Most creditors know that they are taking a risk when lending you money, even if you have a responsible borrowing history. They also know that when financial hardship strikes they may not have much choice when it comes to regaining their lost money. Creditors are often willing to negotiate debts rather than risk losing more money through your bankruptcy filing or debt settlement deals. While they may be stubborn at first, many are far more willing to lower interest rates, waive delinquency fees and even allow for lower minimum payments if it means they will secure more of their borrowed money.

How do you get them to negotiate? It is important to remember than threats are never a recommended tool in negotiations. Just like other aspects of negotiation, dealing with creditors will require some form of compromise. Do not threaten to file for bankruptcy or refuse to pay. Instead, take the time to explain your financial situation and how your creditor can help you repay your loan. Know how much you can afford to pay each month and develop a list of ways you can meet that goal with your creditors help.

 


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