Debt Negotiation Advice

Here is some distilled debt negotiation advice for how to manage your relationships with creditors and speak intelligently about your financial situation. Many indebted individuals wrongly believe that they can bully creditors into offering waivers on money owed by bandying about the possibility of filing for bankruptcy. While it's true that if you file for Chapter 7 bankruptcy successfully, your unsecured creditors may not get any money from you, it's bad etiquette to play the ?bankruptcy card? early on in your negotiations.

Consider this negotiation tactic from the creditors' point of view. Would you want to go out of your way for someone who starts off a conversation rudely and abrasively? Debt negotiation advice experts argue that a savvier tactic is to prepare a compromise in advance and then tip your hand to that compromise in an articulate letter. You can pass this letter by your attorney for professional debt consolidation advice, but as long as the facts contained therein are accurate and your request is civil, you shouldn't run into trouble.

The letter should contain an offer to pay up as much as 75 percent to 80 percent of the amount owed (you should have this amount sealed off in an account somewhere, ready to go) as well as an explanation for your waiver request.

Try to negotiate towards the close of the fiscal month -- creditors typically want to resolve outstanding issues by the first of the month to keep their bill processing clean. Ask your creditor to wipe bad marks off your credit report, and check up on your report in the coming months to make sure that all three bureaus report that you are in the clear with respect to that particular debt. Record your conversations, jot down notes, and file all papers away for easy reference later on.

A key piece of debt negotiation advice is that creditors typically are less than sympathetic. You are just another source of income for them, and they are not necessarily interested in hearing you sob on the phone about the grueling circumstances which led to credit troubles in the first place. Stick to the business facts, and offer creditors something tangible in exchange for their assistance.

As a last resort, you may want to subtly remind creditors that you are not above requiring them to authenticate your debt to them. The bureaucratic process of authentication can chew up a lot of your creditor's time and resources, and he or she will be encouraged to negotiate with you rather than have to jump through the bureaucratic hoops of officially authenticating the debt.