Negotiate Your Debt Like A Professional!

Often when a consumer is up to their ears in debt and toying with the idea
of filing for bankruptcy, but either can't file or doesn't want to, there
are other options. Were you aware that the consumer can negotiate with their
creditors and end up paying a significantly smaller amount than what is
owed?
The Factors Involved In Negotiating Your Debt

Depending on many factors, a consumer can negotiate their debt down. Some of
the factors include the age of the debt, the date a payment on the debt was
last paid and the amount of interest and fees that have been added to the
debt owed. Sound interesting? Read on it gets better.

Before going any further it is important to mention that this path is not
easy, creditors are often not nice to deal with at the best of times. When
you are the object of their attention, you can be inundated with rude and
threatening phone calls, nasty letters and many other tasteless tactics used
by some companies to get money out of you.

If you can learn to be un-swayed by these tactics and remain calm and level
headed through out the whole process, you are well on your way to sorting
out your debts and paying much less at the same time. The reason that
creditors resort to these sorts of tactics is that it is about all they can
do to get the debts paid to them. Medical bills, store cards and credit
cards are called unsecured loans. This means that they have no collateral
tied to them.
The Problem

When a consumer stops paying their bills, the creditor has a few options.
They can try bullying you into paying the debt or they can take you to court
and hope that they receive a favorable ruling in order for them to come to
your house and remove possessions to cover their bills. The latter is not
commonly practiced as the risks of getting an unfavorable verdict from the
judge are considerable. Besides that, it is probably hardly worth the
trouble since these types of debts are usually considerably smaller than
secured loans, such as houses and cars.
Where To Start Your Negotiations

So how much can you offer a debtor and have it accepted? There is no set
figure or sum and no guarantee that a company will accept your terms.
However, if they have a choice between being paid something or nothing, they
are going to choose some of the money any day. A good guide to begin your
negotiation is 25% or less for debts that have recently been charged off.
Often you can offer much less if the debt is older and the company has added
a host of other fees and charges to the debt.

Ok so you are ready to negotiate? Hold on a minute, there are a few more
things that you need to arm yourself with before going off to credit battle.
Remember the best defense that you can have is to know exactly how your
opponent works and what you can and can't do.

Tips To Negotiating Like A Pro
Below are a few helpful tips:

* Never negotiate over the phone, in fact, if a creditor contacts you by
phone- hang up. All of your correspondence should be conducted by mail.

* Record everything; keep letters, numbers and dates. Never expect that an
agency will remember what was agreed on or keep their word without proof.

* Keep copies of every letter that you send to the credit agency and make
sure to use registered mail, or mail that has to be signed for. That way you
have proof that the other party has received your correspondence.

* Never seem to be too eager to settle the debt too soon, never accept the
first or second settlement offer and above all, never let the agency think
that it has the upper hand.

Another useful approach is the good old threat of bankruptcy.
While its not as easy as it once was to file bankruptcy.

Tip - Here is an article on the new bankruptcy requirements you must meet in
order to file, read it so if you pull this trick, you sound knowledgeable)

If the creditor believes that you are about to file for bankruptcy, they
will often be more than willing to settle for anything they can before you
file and they loose all hope of ever getting anything out of you. But
proceed with caution if you acquire any more debt after telling a creditor
this. Then you may not be able to get rid of this debt should you file for
bankruptcy.

If the process seems a little difficult for you to handle or you feel that
you would be eaten for breakfast by a hungry credit agency, you maybe right.
You can either:

A. If you have a trusted family member that is good at negotiating you may
ask them for help. Keep in mind, some companies will not speak with them
unless you fax them a power of attorney letter stating your friend or family
member has the authority to speak for you.

or

B. There are options available for dealing with these agencies.
A debt negotiation company can provide you with advice and they can
negotiate settlements with the agency for you. The Debt negotiation company
will help you set up a savings fund to start collecting money to pay your
debts. They can also help shed some light on how to begin living a debt free
life.

About The Author: N. Wilson is a loan consultant & a freelance writer for
http://EzCreditRepairSolutions.com Which specializes in credit repair tips &
helping people improve thier credit. For more articles on do it yourself
credit repair please visit
http://www.ezcreditrepairsolutions.com/DIYcreditrepair.html