Negotiating With Creditors,
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Negotiating with creditors, is particularly effective if you have priority creditors, such as the Internal Revenue Service.
Creditors hesitate to stand in a long line with too many competing creditors, or stand behind a formidable creditor, such as the IRS who always gets paid first.
Try to repay a percentage of the debt in lump sum cash payments (25-35 percent) You may try to repay higher percentages with more patient creditors, but insist that payments be made over months or even years.
How negotiating with creditors on your terms can be very beneficial to you:
The amount to be paid often starts out low. Offer 10% more than your creditors would receive under a bankruptcy ruling. Trade increases in 5% increments in exchange for substantial creditor concessions. Never ever offer to pay more than you have available. Your plan must be realistic to work.
Payments:
Immediate vs. future payments offer an immediate payment based upon what you can afford to pay. Future payments must be based solely upon your surplus income only.
Length of payments vary, although every creditor wants full repayment, you should never agree to more than your down payment plus two years surplus income.
The possibility of returning merchandise, returned merchandise must be regarded as cash paid to your creditor.
Interest payments.
Fight for low interest or no interest payments. Inform your creditors that they do not receive interest at all in bankruptcy court.
Your credit rating, ask to have your credit rating upgraded as you make timely payments. This alone can be a powerful tool for rehabilitating your credit.
A creditor stands to make much more money in the future than he lost in the past. However, only cooperative creditors are deserving of your future business.
When you are negotiating, negotiate in good faith. Try to be fair to your creditors. Unless you enlist your largest creditors first, it is unlikely you will persuade the smaller ones.
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Negotiating with creditors about your future business, The prospect of future sales can be enticing to creditors. Be flexible because your creditors only want their money. Treat all creditors equally. One creditor cannot get a better deal than the other creditors.