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How to Negotiate With Creditors

Created: On December 12, 2008 @ 5:38 pm In

If you’re having trouble paying on debts because of a job loss, medical bills, or other unexpected event, it’s better to try and negotiate with your creditors than with a debt collection company. Negotiating a settlement or payment plan with creditors can keep your delinquent accounts from going to a collection agency.

Contact your creditors and use the following tips to mow down that pile of debt.

  1. Offer a lump sum settlement if you have enough cash in savings. Some creditors may accept settlements as low as [1] 50% of the total balance due. Others may only accept 60% to 80% of the total.
  2. If you don’t have a lot of cash, ask for payment plan where you can make affordable monthly payments until the debt is paid off. Ask to have negative information deleted from your credit report when the account is paid in full.
  3. Let your creditors know that you’re trying to improve your financial situation and will be responsible for paying your debts.
  4. Create a budget before negotiating debt so you’ll be able to show creditors your action plan for getting your finances together.
  5. Get a written agreement for your settlement or payment plan. Keep careful records of phone calls, letters, and notes.

Not all creditors will agree to a settlement, but it can’t hurt to make a phone call to plead your case.

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URLs in this post:
[1] 50% of the total balance due: http://www.creditinfocenter.com/debt/originalcreditor_debtsettlement.shtml