Negotiate

If your decision is to negotiate on an item, the most important advice I can give you about negotiating is to do your research before entering into negotiations with a creditor or collection agency.

Here are some other great resources to help you get to know the ins and outs of the credit counseling and debt negotiation industry:

• National Foundation for Credit Counseling
• Association of Independent Consumer Credit Counseling Agencies
• The Federal Trade Commission
• National Consumer Law Center
• Consumer Federation of America’s Report: Credit Counseling in Crisis
• National Consumer Law Centers Report: The ABC’s of Credit Counseling

Here are the basics to debt negotiation:

1. Lay your debts out on paper.
2. Validate collection and charge-off debt with the creditor or collection agency.
3. Verify the Statute of Limitations and 7-year reporting period.
4. Figure out how much you can realistically afford to pay.
5. Call the creditors to discuss your options or negotiate.
6. Get the agreement in writing, and then follow through with the payment plan as agreed.

The key to successful debt relief negotiation is to establish clear goals before you start, and be persistent. Many times you may have to contact the creditors or collection agencies several times before reaching an agreement. Be professional even when they are not. Do not let your emotions get the best of you. Be polite, calm, and cool.

I am a true believer in trying to do it on your own if you have the time because no one will have your back like you will. It does not take a specific degree to get the job done. However, there is a clear precedent set years ago by the credit counseling and debt negotiation industry that makes creditors very reluctant to deal directly with consumers. But a precedent is not a law, and if you do your research, and work hard enough, you can definitely do it on your own.

Two important things to remember:

1. Negotiate with confidence that you will win. By doing your research, you will gain the knowledge you must have to successfully negotiate derogatory debts. Knowledge is power, and once the collection agency or creditor realizes that you have done your research, not only will you limit their response options, but they will realize immediately that you are not a pushover. The tactics that they would normally use on a consumer who doesn’t know their rights, will now be useless to them, and they will be more apt to agree to your terms.
2. Get everything in writing. Words mean NOTHING when it comes to agreements with collection agencies or creditors and the terms they agree to on the telephone.

On the other hand, if you don’t have the time or emotional energy to face creditors and collection agencies head-on, you do have options. My best advice is to do as much research and cost comparison as you can before you hire a company to help. Make sure you do the math on the plans they propose. In other words, make sure that at the end of the day, the payment plans, or fees make sense.

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