How Debt Management Programs Work

Why Negotiate Debts

juggling debtDuring rough financial times, there’s no shortage of reasons that you might need debt negotiation. Job loss, medical issues, divorce, house fire, and a family death are just a few reasons people negotiate their debt. You might simply be in over your head and need some relief from your overwhelming bills. Anytime you can’t afford to make your monthly debt payments, debt negotiation is an option.

What to Say to Your Creditors

Negotiating your debt requires agreement from your creditors. You have to know the right thing to say to convince creditors to take a loss on what you owe.

Before you call your creditor to talk about debt negotiation, you need to gather some information about your account like the account number and amount you owe.

Video: A Debt Negotiation Attorney Can Help Reduce Your Bills

Know exactly what you want to negotiate. You might ask for a reduction in the overall amount you owe or you could ask for a lower interest rate. Either would make it easier for you to pay off your debt.

Debt NegotiationYou need to be prepared with a payment offer that includes the total amount you can pay and the time period over which you can pay it. For example, you might negotiate a one-time payment that’s 40% of the total amount you owe.

Hardships With Debt Negotiation

Many debtors aren’t sure what to say to a creditor to get them to lower the debt bill, so they use a professional debt negotiator to help reduce the balance owed. A reputable debt negotiator has experience working with many of the major credit card companies, so they know the thing to say to successfully negotiate your debt. Unless you’ve negotiated debt before, you may not achieve the positive results of a professional.

The Federal Trade Commission warns against confusing debt negotiation with consumer credit counseling which allows you to pay your debts in full over time.

Debt Negotiation Advantages

There are a few benefits to negotiating your debt, including the obvious ease of paying off your debt.

Disadvantages of Debt Negotiation

There are a lot of good reasons for debt negotiation, but there are some drawbacks too.

Video: In the Current Economy, Lenders Are More Likely to Restructure Your Mortgage

Before you decide to negotiate your debts, evaluate your ability to pay them in full. Make sure you realize both the advantages and disadvantages before making a decision. If you’re not certain you can get your creditors to agree to a debt negotiation, don’t hesitate to hire a professional to help you. The United States Organizations for Bankruptcy Alternatives is a debt negotiation association that helps consumers choose a reputable debt negotiator. Contact them by phone by calling (281) 820-0666.