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Debt Negotiation Tips
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Debt negotiation can get you out of debt and it can usually accomplish that fairly quickly. There are debt negotiation programs available that can do all of the work for you, but quite often you can do it yourself and avoid the added expense of hiring someone to do it for you.
It is important to realize that when you go up against a collector, you are dealing with a seasoned negotiator. You need to have a few tools under your belt and these tips will give you the backing and power that you need to handle your own debt negotiation and get out of debt.
Debt Negotiation, Your 7 Tips Are:
1. Know your rights. When a collector is trying to collect on a debt from you, there are certain rules that he or she must adhere to and it is important that you know them.
The Federal Trade Commission has a wealth of consumer information on fair debt collection, it would be wise for you to peruse that information and arm yourself with that knowledge. The National Consumer Law Center also offers information on debt collection.
Also learn the laws of your state. You can learn about the individual state's debt collection laws through the attorney general's office in that state.
Once you begin learning your rights as a consumer, you may be surprised to realize that some creditors may have taken advantage of your ignorance in the past, but once they know that you are educated and informed, they will know that they can not get away with some of their sleazier tactics.
2. Put your priorities first. Pay your house note or rent, pay your utilities and put food on the table. In other words, put first things first. A credit card bill that is not paid is not your most important bill, despite what a collector may try to have you believe.
Put your family and their necessities first. You may need to cut back on some of the frills and little extras, but take care of your family and necessary bills first.
3. Make an estimate of what you can pay - then offer less. This is the golden rule of debt negotiation. Estimate what you can afford to pay, but don't get yourself into something that you can not afford. Estimate what you can do, then undercut it.
That is, offer less that what you can afford and see where the debt negotiations take you. Set a limit, though, and do not exceed it at any cost.
Other - don'ts - include sending postdated checks to a collector or authorizing automatic electronic withdrawal payments from your checking or savings account. Never go that far in trusting a debt collector.
They can do some very underhanded things and even violate the law, but by the time they do, your checking account could be in serious trouble or you could suffer further financial damage.
4. Control the information that you offer. Don't go into some long drawn out story about why you can not pay, they rarely care and that is their job. So stick to the facts, stay calm and remain focused.
DON"T give a debt collector personal information including
- Where you work
- Where you bank
- Your checking account number
- Any additional phone numbers
5. Record the call if possible. This can be invaluable on so many levels! It allows you to keep a record of the call and it is an excellent way to keep the collector on his or her best behavior.
You can secretly record your telephone conversations in 35 states and the District of Columbia. In the other 15 states, you can record phone calls with the other party's consent. So, if you inform the collector that you are taping the conversation and they continue to talk, they have given their consent.
6. Keep impeccable records. Keep all of your collection letters in a file and maintain a log of collection calls. Record the day, date and time of the call, the name (first and last) of the person with whom you spoke, the collection agency and a detailed account of what was said.
7. Get your deal in writing. Before you make that first payment, make sure that you have your debt negotiation in writing. If they settled with you for half of your debt, make sure that you get the agreement in writing.
Next, send a certified letter (return receipt requested) to the collector and outline the entire payment agreement. This way, you will have a receipt when the letter is delivered and keep a copy for your records.
If you make the payment with a check, write this in the memo area on the face of the check: Cashing this check constitutes payment in full.
Finally, try to conduct your debt negotiations at the end of the month. Collectors are usually given a commission and it may be an extra incentive for them to cooperate.
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