Negotiate Debt

Top 10 Tips To Negotiate Debt The Right Way

With today's challenging job market and tough economy, more and more individuals are finding themselves looking for an effective way to negotiate debt.  You may not be aware that you can actually do this on your own behalf, without an attorney but be warned, it is not an easy task.  Creditors are far from nice to deal with and they could care less about your reasoning for falling behind.

When you become the object of a creditor's attention, you will often be pestered with threatening and rude phone calls and nasty letters, not only to you but to your family members and place of employment as well.  If you can stay calm, keep a level head and refuse to be swayed, you can sort your debts out and pay substantially less.  Below are the top 10 tips to negotiate debt like a professional would.

  1. Learn Your Rights – Debt collectors are required by law to play fair.  In fact, many states actually have their own laws concerning debt collection.  When you take the time to learn what your rights are, debt collectors are less likely to attempt aggressive tactics because they are well aware that they are breaking the law.
  1. Prioritize Your Bills – Of course, you already know that paying your electric bill is more important than paying a credit card bill when faced with this kind of decision.  While a debt collector may argue that their bill takes top priority because it is past due, this is not the case.  When you negotiate debt, it makes absolutely no sense at all to put yourself in an unfortunate position where you can't pay important bills and provide for your family just to make the bully on the other end of the phone happy.


  1. Bid Low – Estimate what you think that you can afford after all of your household bills are paid and then offer less than that.  Never agree to something you cannot afford, even if they say there is a minimum amount that they can accept.  Also, do not send them a postdated check because they are not required to hold it and never agree to electronic payments that are automatically debited out of your checking account because creditors have a habit of taking too many payments.
  1. Don't Get Personal – When you negotiate debt, you may be tempted to explain the story of why you are late but creditors do not care.  They are not paid to be sympathetic.
  1. Stay Calm – These are professional negotiators you are dealing with.  Breathe and stay calm.  If you get worked up, you are more likely to lose control and lose the battle.
  1. Tape The Call – Did you know that in 35 states, it is perfectly legal to record your phone conversation?  And, in the rest of the states, you can record the call if you have permission from the other party.  If the debt collector doesn't wish to give you permission, they aren't worth talking to.  Even if you are not recording the call, if you tell them that you are, it helps keep them on their best behavior.
  1. Keep A Log – One of the key roles to negotiate debt properly is to be organized.  Keep notes about the calls, time of day, length of call, who you spoke to and what was said and be sure to file all collection letters together.
  1. Get It In Writing – Do not pay one penny until you get the whole negotiation in writing.  If you are paying a bill that is an agreed upon amount to cancel out a debt, write on the check that by cashing the document, the debt is dismissed.
  1. Fix Your Credit – Make sure that after a debt is paid off that the debt collector removes negative information off your credit report.
  1. Timing is Everything – The best time to negotiate debt is near the month's end.  Debt collectors earn commissions based on their monthly progress so traditionally, you will get a lot better deal after the 25th of the month.