Understandably, being in debt or at risk of foreclosure can be stressful. However, being arrogant or insolent with lenders can be a huge mistake. If a lender detects that you are playing games, or if you become threatening or childish, you could suddenly be hit with lawsuit and the full force of lender vengeance.
You need to approach your lender as someone who is reasonable, calm and patient. There are, in fact, instances where playing it cool with your lender will get you better debt settlement terms.
Remember that your lender holds all the power to negotiation in a loan modification or credit card negotiation.
It is essential you know your lending institution’s debt settlement history. You can confidently carry forward, safer in the knowledge of when to hold the cards you have and when it is time to fold them.
- With some debt, it is better to just let it slide. Your case should dictate for you if it is time to let your outstanding debt go to collection. If your credit score has already taken a beating, you may be able to get a considerably better deal from a collection agency. Collection agencies are often willing to favorably report on a collected debt if you negotiate well.
- Sit and wait. On some occasions, you should let lenders agonize over your outstanding debt. If it becomes apparent that they cannot coerce you through ordinary measures, they may come to the bargaining table with a better offer.
- Do your homework and find out what a good offer is. If your lender’s debt forgiveness threshold is 35% and you pass for a better offer, you might have just missed the best deal. You may not get an offer with such generous terms later. Forgiveness of 50% or more is extremely rare. Under no circumstances should you hold out for a better offer—it won’t arrive!