Tips for Negotiating a Settlement with Your Creditors

If you have creditors or debt collectors calling you about a balance you have been unable to pay off, it’s understandable if your instinct is to ignore them.

Unfortunately, neglecting the problem will not make it go away—sooner or later, you must confront your debt and the creditors that hold it.

The good news is that some creditors and collectors are willing to negotiate in certain circumstances. So how do you begin these negotiations and get a reasonable deal out of them?

The following are a few tips:

Be consistent with your story: Creditors need to know what led to your inability to pay your bills and if you have experienced any financial hardships. If you were ill and racked up medical bills, if you or your spouse lost your job or if you have mounting interest rates, be sure to let your creditors know about it. Tell the truth and be consistent.

Keep an even temper: No matter what happens, you must keep your cool. If you lose your temper, you could severely damage your chances at getting anything out of the negotiating process. Having an attorney negotiate on your behalf can help you avoid losing your composure during discussions with your creditors and debt collectors.

Keep thorough notes: Always have a pen and paper handy during any discussions with your creditors so you can take written notes. Your note should include the name of the person you talked to, when you met and what you discussed. This will establish a reliable record to help you determine if your creditors violated any laws in their dealings with you.

Save all your mail: Never throw away any mail you get from your creditors or collectors. Open it up, read it carefully and place it in an organized file. Again, this helps you establish a record you can continually refer to throughout your case.

Have goals in mind for your settlement: Carefully analyze your finances to determine exactly how much of your debt you can afford to pay. You may be able to negotiate the best settlements if you can make a lump sum payment to resolve that debt. Payment plans typically result in you paying more over time, so if you agree to a payment plan, make sure you clearly understand exactly how much you are paying and how much time you have to complete those payments.

Get the deal in writing: Never settle for a verbal agreement. Always have the deal in writing before you begin making any payments. This will allow you to avoid suddenly changing terms to the agreement or a “your word against theirs” situation.

However, it is almost always better to have an experienced attorney on your side. If they know you hired a bankrupty attorney, they know they should settle. If you need to explore your options for negotiating with your creditors, seek the assistance of an experienced Centennial bankruptcy attorney at Long & Long, P.C.