Negotiating your debt on your own is possible, but there are some basic rules you should follow for best results and to minimize the chances of your getting disorganized or even confused and frustrated during the process. If you are ready to contact your creditors or any collection agencies currently holding accounts of yours, take a look at a few helpful tips first.
Know What to Say
Whether you have bills that are in collections or you are just a little late paying your creditors, you need to be prepared for when you contact them. Have a story in mind that is both true and short so you can quickly inform the creditors or collection agencies of the issue. For example, if you lost your job or have been sick, you should mention this early on in the phone conversation or letter.
Then you need to have a goal in mind, such as to get rid of late fees, reduce the interest rate, or decrease the total amount you owe. Creditors and collectors cannot give you what you want when they do not know what that is. Instead of being vague when dealing with them, get right to the point to avoid wasting your time.
Document Everything
You will likely talk to more than one person when you negotiate your debt. You could end up with different answers from each individual, so it is important to get everything in writing. If you make an agreement over the phone, there is no way for you to prove it later, so you should request a letter stating the terms of the plan. You can even simply send a letter requesting certain changes, after which you should get a letter back from the creditors or collectors when they agree. You may also use email for this purpose.
Do Not Let Anyone Intimidate You
Many people become flustered when trying to negotiate bills that are past due or in collections because for fear of creditors and collectors making threats in an attempt to scare debtors. Debtors are protected under the Fair Debt Collection Practices Act (FDCPA). The FDCPA prohibits debt collectors from using abusive practices in an attempt to collect debts from debtors. You can always seek legal advice from a lawyer.
In addition, if the creditors or collectors reject your initial proposal to negotiate, you can always send another offer that is more likely to be accepted. You may have to compromise, but in most cases, you should end up with an arrangement that suits you better than the original one, allowing you to keep your debts from getting further out of control.
You should take these tips into consideration before contacting creditors and collectors on your own. If you do go ahead and get in touch with them by yourself, the worst-case scenario is that you will not get the deal you want.