Credit card debt negotiation is often a glimpse of hope for one who may be drowning in a sea of financial burden. Reaching a compromise with your credit agency over a difference of just a small percentage of debt may be all it takes to prevent years of future fiscal struggles. Negotiation doesn’t happen in one sitting, and certainly not with just one phone call. The process may end up taking days, weeks, even months, but the effects of bankruptcy could last years.
1. Compile Detailed Records
From the very beginning, collect and keep all credit card and bank statements organized and quickly accessible. Record every correspondence between yourself and the credit or collection agencies with dates, names, and phone numbers. The problem is that collection agencies generally have a high employee turnover rate, so you may find that your dedicated representative is there one week and gone the next. If you don’t have numbers and proof to back up your claims you will never get far in the negotiation process.
2. Don’t Act Eager to Settle
You wouldn’t take the first offer you receive on a car or a home, so don’t treat a creditor any differently. Know what you can afford to pay and fight to lower it. When it comes to good credit card debt negotiation, you want to press that you are in a very stressful financial situation, and that if the rates don’t go your way you may not be able to pay anything at all. Don’t ever let a collector know that you want to settle quickly because of an upcoming car or home purchase otherwise they will never budge.
3. Be Careful Threatening Bankruptcy
The threat of bankruptcy can immediately get a creditor on your page, but use the remark sparingly. You want the collector to believe that they must jump on the boat quickly to receive a lower amount or risk collecting nothing at all. However, if they are keeping track of your correspondence and realize that you have accumulated more debt since dropping the “b” word you may not be able to discharge this new debt within the bankruptcy.
4. Everything in Writing
Any spoken agreements may as well have never been uttered. This is the main reason that phone correspondence can work against you when negotiating. Debt collectors have no obligation to fulfill their end of the bargain, and even if you do have a signed agreement you may still have to fight to bring it into effect. The high turnover rate mentioned earlier may play a part in this since communication can be flaky at best.
5. Get Reliable Help
Don’t be afraid to invest in quality professional advice. Try to avoid using any for-profit organizations unless they are an obviously reputable source. A professional in charge of credit card debt counseling will be able to help you draft agreement documents to ensure your debt gets handled fairly. The small fees invested in such a service will pay off for the seven years your debt could remain on your credit history. Be careful when negotiating but don’t be afraid to take the plunge. Successful credit card debt negotiation may save your financial future.
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