Borrowers in debt negotiations make the mistake of appearing eager to settle and ready to go to any length to make everyone happy. They forget that big debt is big business and big business doesn’t have feelings. To debtors, you are a number and that number is what they hope to make off of you. Though you are speaking to a human being, they most likely already have exact orders on how to deal with you. Here are a few more tips when entering a debt negotiation with a creditor like a credit card negotiation or a mortgage loan modification.
Play it cool
If you need your creditor to swallow your bad debt because you want to take on more debt, or buy a new home, forget about it. If the creditor has any reason to believe you want to settle your debt for any of these reasons, they will demand you pay in full.
What’s more, negotiating with a creditor in earnest is not a hardball tactic; that’s what they want. Good faith is instrumental in loan modifications. It begins to erode, however, the more delinquent you become. You may have a turned a new leaf, but collection agencies and creditors aren’t capable of doing the same.
Bankruptcy is a final resort, but can stave off aggressive creditors
Bankruptcy will wipe out your debts, but also annihilate your credit report. It will be seven years before you can reasonably expect to apply for a new loan. However, creditors loathe bankruptcy and will often do whatever they can to stop you from filing for bankruptcy. You can use this to your advantage in the advanced stages of a debt negotiation. You may even leverage a better terms on your outstanding debt or prevent nasty blemishes on your credit report.