Knowing Who to Talk to
Creditors of unsecured debt understand the tremendous financial loss they will face if a customer files bankruptcy. They also understand that a person can move and never send the post office their forwarding information. Rather than face this, they are often willing to negotiate with people. The thing is, they don’t want you to know this. They’d rather you live in fear. Always pay your minimum monthly payment and raise rates on you if you pay even an hour late.
You can negotiate debt by yourself or apply for help with any company offering that service. Creditors are more likely to listen to an experienced company because it shows to them that you are seeking advice and not willing to fall for their false information.
If you opt to do this by yourself, which is fine, remain calm and polite. It takes patience. Customer service reps are told to do whatever it takes to get the money you owe. You may need to make a number of calls but keep insisting that you talk to a supervisor until you get results.
What to Say to Guarantee Results
Before any creditor will take you seriously, you must have some money set aside. Say you owe a credit card company $10,000 and you have $5,000 in your savings. Many companies will settle for that amount, but they expect the account paid in full. Have proof of available funds ready.
When you make the call, you will need to explain your hardship. You may have lost a job, suffer from failing health, gone through a divorce or your significant other may have passed away. Creditors will understand these life-changing events are common bankruptcy triggers.
Give them your debt-to-income information. If you can paint them a clear picture of your income compared to your monthly bills, they’re likely to be amenable to your offer.
If they refuse your offer and send you to collections, explain to them that you must now consider bankruptcy. Often, the word bankruptcy is the key that spurs them into being willing to meet your demands.
Video: How to Pay Credit Card Debt without Filing Bankruptcy
When to Accept an Offer
Once you’ve negotiated with the company and have an offer you know you can meet, accept it. Be reasonable. If you owe $10,000, it’s unlikely any company would accept an offer of $1,000. Usually fifty percent is the lowest any company will go. Never agree to their first counteroffer. Stand firm for what you know fits your financial needs. When you finally do reach an understanding, ask that the paperwork be mailed to you.
Do not submit the payment until you’ve received and read the debt negotiation contract. Suppose you send payment as soon as you settle on an amount. A week later, you receive the paperwork, and they've forgotten to note that they are discharging the remainder your debt. At this point, there is little you can do to get your payment back and you now owe the rest of the balance.
Once you have the signed contract, submit the full payment. You cannot split it up into separate payments. When you send it, either send it electronically through your bank or send it certified mail. Always pay the extra for signature receipt so that you have proof their offices have accepted the payment.
Understanding the Laws
The Federal Trade Commission came out with the Fair Debt Collection Practices Act to help educate consumers about things debt collectors can and cannot do. It is important to note that if you owe money and have collection agencies calling you day and night, you can mail a letter requesting the company stops calling. If they fail to do so after a written request, you can gain financially every time they break that law.
Some creditors have been known to use threats to get money. This is illegal. You cannot be arrested for non-payment of unsecured debt.
Insight from Experienced Attorneys
Before entering into any debt-negotiating program, it is important to understand the laws. You owe the debt, so it is important to keep in touch with your creditor and explain the situation. This will not stop your debt from entering into collections, but sometimes it is enough to get them to hold off sending it to a collection agency for a few weeks.
If you opt to use a debt-negotiating firm, look into companies that are associated with a law firm. These lawyers specialize in bankruptcy laws and know exactly how to negotiate with creditors. They’ll be effective and follow every law to a tee.
It is most important to come up with a plan to pay off your debts and start building your credit score back up. You’ll find that the hardest part is simply taking that first step.
Video: Is Professional Debt Negotiation Right for You?
Debt Negotiation Companies
American Consumer Credit Counseling
Auburndale, MA
1-877-289-8889
Christian Debt Consolidators
Deerfield Beach, FL
1-866-958-DEBT
Debt Rite
1-800-558-5597
Lewisburg, WV
Debt Shield
Columbia, MD
1-866-902-5956
Franklin Debt Relief
Chicago, IL
1-877-274-1260
Freedom Debt Relief
San Mateo, CA
1-800-910-0065
Help U Out Of Debt
1-866-374-3101
Corona del Mar, CA
In Charge Debt Solutions
Orlando, FL
1-877-486-4916
Less.Com
Rochester, NY
1-800-543-9573
Lincoln Debt Relief
Gainesville, FL
1-800-957-8310
My Debt Negotiation
San Diego, CA
1-800-738-5306
Net Debt
Laguna Hills, CA
1-877-998-3328
Superior Debt Relief
Fort Collins, CO
1-888-366-3414
Total Debt Relief
Vancouver, WA
1-360-449-5933
USA Debt Relief
Tallmadge, OH
1-877-945-8655
Send this page to a friend ...