Reducing Debt through Negotiation
Being overwhelmed with debt is one of the biggest financial problems facing Americans in this shaky economy. As thousands of people lose their jobs and homes are foreclosed, many are racking up huge amounts of debt while just making necessary purchases to get by each month. Whether coming from student loans, credit cards, or medical expenses, debt is on the rise across the country.
Through the powers of negotiation, however, it is possible to escape from under the heavy burdens of debt.
Video: Loan Consolidation is a Good First Step
In debt reduction negotiation, a person may reduce the total amount owed on an unsecured debt with the ultimate goal of totally clearing the original balance sum owed. This process is sometimes also referred to as “debt management.” Often, people solicit help from debt reduction companies to act on their behalf. Effective and strong negotiation is key in this process, and the person owing the debt can, with some simple strategies and pointers, handle the situation on his or her own.
First, be completely honest with your creditor(s) when you inform them of your desire to negotiate a lower payback amount. Make sure they know that you do, indeed, intend to pay them and that you are doing all you can to ensure they receive what is owed to them. Be sure to do this in writing so both parties can retain a copy of the new terms you are asking for. Figure out exactly what you can afford each month to put towards paying down your debt. Look for ways to reduce your spending and apply the extra funds towards the repayment.
Tips for the Negotiation Process
When you handle a debt reduction negotiation on your own, you have the same legal rights as if a law firm or attorney were handling the case for you. Treat the process as you would any professional endeavor, but be sure to learn the proper vocabulary and emphasize key words and phrases like “budget,” “personal responsibility,” and “financial commitment.” When you show your creditor(s) that you are serious about repaying your debt at a reduced amount, they will see that you are committed to taking control of your finances.
Video: Top 4 Money Mistakes - Suze Orman
Who you speak with about reducing your debt will depend on what kinds of debt you have (i.e., credit card or student loan) and how many of those outstanding amounts are attributed to your name. With credit card debt, for instance, financial expert and television commentator Suze Orman recommends starting to reduce debt on those cards whose credit limits you’re nearing. But if you’re tackling a total debt amount on a number of cards, she advises paying off the highest-interest-rate cards first.
Contact the credit card companies accordingly depending on your situation. In many cases, debt consolidation is recommended for handling debt, though attorney John C. Colwell of Debt Relief Clinic of southern California advises against it. Deciding to negotiate to reduce your debt is a big step on the road to financial freedom, but with the right tips and strategies, you will be able to secure a reasonable solution through negotiation to repay what you owe.
Debt Negotiation Companies:
Franklin Debt Relief
Chicago, IL
(312) 445-4700
Freedom Debt Relief
San Mateo, CA
(800) 544-7211
Superior Debt Services, Inc.
Fort Collins, CO
(888) 366-3414
CareOne Credit Counseling
Columbia, MD
(410) 910-1735
Debt Reduction Services
Boise, ID
(208) 378-0200
Nationwide Debt Reduction, Inc.
Mesa, AZ
(800)890-6658
Debt Free After All
Manchester, MO
(877) 534-8900
Resident
Allen,TX
(800) 319-1245
Debt Solutions USA, Inc.
Coral Gables, FL
(888) 357-8683
Consumer Bankruptcy Law Center of Peter A. Orville
Binghamton, NY
(866) 935-7708
Greenway Law, LLC
Birmingham, AL
205-324-4000
Send this page to a friend ...