Negotiating with Creditors and Not Dealing with Predators

Share Negotiating with creditors might sound scary, but in fact, it can be less stressful than negotiating in a hostage situation. In all good humor though, it is extremely important to be fair, honest, and professional.

It’s wise knowing that you are dealing with a customer service agent, who is going to treat you in much the same way you treat him or her.

Make sure you have a clear picture of what is going to unfold, before you get on the telephone.

Let's break down and simplify the process by going through some quick and easy steps, before and during the interaction.

Step 1) Relax!

Yes, in negotiating with creditors, you have to try to relax; because you might be surprised to know that a creditor cannot send you to jail, nor take away all your worldly possessions.

Be aware that some of your personal property is fair game in most situations, including your car, your income and possibly property. This might seem like a no brainer for some of you, but I can assure you this step is just as important as any of the others.

Step 2) Stay calm!

Try to remain as polite and non-confrontational as possible throughout the entire conversation. I can assure you that your creditor does not like being yelled out or treated rudely just because you flew off the handle. Negotiating with creditors is always best conducted with respect and trust.

Convey your need for assistance in an earnest and polite way. Assume that the person on the other end of the line can get just as frustrated as you when you begin to raise your voice at them.

If are the type of person to anger easily, it might be better to either talk with a credit negotiator, or call back when your feeling less vocally abusive.

Step 3) Be Informed!

Remember that your creditors will likely ask you what you can afford to pay each month based on the amount of debt you have collected with them.

How many interest only payments you want to make, and how long your need reduced payments for. Do not allow them to know how much you are able to pay. Try not to show all your cards, like in poker, you have something to gamble with.

Know the maximum and minimum you can afford to pay each month, and never agree too more than that. Always keep your end of the bargain, and never risk losing that creditor’s trust.

Step 4) Begin Negotiations!

You should know that creditors could become increasingly motivated to collect when you fall behind on your payments. So with this in mind, agree to make a token payment.

This will demonstrate to the creditor(s) that you intend to pay off the debt you have acquired. Make sure you try to get your negative remarks removed if you are willing to play ball with them.

Inform them that once you begin to make payments on time, it would be appreciated if they would upgrade your credit rating.

The amount to be paid often starts out low; sometimes as low as 5%, so offer 5% more as a good faith gesture. Also note that negotiating with creditors about your future business with them can be an enticing prospect.

Step 5) Finish Up!

A successful negotiation is only successful when both parties come away happy and content. In the case of negotiating with creditors, they might be willing to drop the monthly payments or interest rate, but make sure to provide them enough collateral to do so.

Your goal is to give up as little as possibly while staying realistic. Knowing who has the upper hand in the negotiation can make it easier in the long run, so stay on point, and keep moving forward.

Ending the negotiations should be relatively simple, once both parties feel their sides have been listened to, and acted on accordingly. I hope this little bit of knowledge has helped you in your quest for peace of mind and financial stability.

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