Let us presume this scenario – you have four credit cards with debt ranging from $5,000 down to $3.5 million and you make a minimum payment of $300 every month. The interest rates are high as well as the late fees are very high. Debt collection agencies are hounding you for the payment of the debt. Do not worry much as you might be successful in this negotiation process.
The negotiation process involves contacting the creditor who has issued a note to a collection agency regarding the same debt. The collection agency is in a better bargaining position for settlement rather than you. You may even be able to negotiate a debt settlement of 50%-70% of the note. Resistance to such a low settlement will only succeed if you start from a lower amount. Once the negotiation note has been prepared, make sure you read the terms and conditions before making a moonlight proposal for settlement.
Now you must be clear what a debt negotiation is all about. The negotiation will include the repayment amount as well as the interest that will be charged and the repayment schedule in writing. The document must be convincing enough to convince the creditor that repayment will be made without any defaulting or legal action being taken. Once the information is in your hands, your settlement stretches very slowly and the debt comes down. Use professionals for negotiation.
Now back to the debt negotiation – you must have your procedure planned well. You must start with other means even if it is just voice chatting or by visiting the creditors where the debt is held. The same should be done in writing and, the same must be understood by the creditor even if the document is in your own hands. This will be the first column of your negotiation – in this column you must put the logic of your approach. There is no space for speculation here. Selection of the card issuer is not the only thing on this list – the payment amount, late fee and interest rate at which you are making repayment will also be very important.
How to negotiate your dues:
The negotiation process is carried on a two sided coin. One side indicates the interest on the note and you will be paying high interest as well as high late fee if not a waiver. If the interest is waived you may be whiteening the debt immediately after the settlement and debt management is easily done. The debt settlement only ensures maintenance and a fairly even spread between your assets and debts on your side.
Another side of the coin is where the settlement will cost you a lot in terms of monthly installments. You must calculate the amount you will be putting into savings after settlement – be realistic with a target to save at least half of the payment amount – this may take time and calls from the creditor. At the same time you have to make sure you don’t default again on the debt and instead return to the initial purchase and start new debt management – this is called program withdrawal. If the settlement will not waive the interest amount you will find yourself in deeper trouble.
Check your objectives
Take a scenario where only pay the minimum payment every month. At the end of three years you have paid more than the principal amount. Where is the profit being generated for the credit card issuer? If the profit is being earned by increasing the rates of interest you can say refunds are an interest refund. If it is an effort to hefty up the rates of interest and bad faith – in such a case you will receive a lot in your credit card account and return of the debt is not possible. You will have to find out an effective method of making settlement if you want to obtain the right debt relief decision.
Most of the companies in the market are financed or supported by the credit card lenders. This means that they will only try to b have a successful negotiation for you when they know you are in trouble. On negotiating with the creditors themselves you can make use of a debt counseling meeting session. This is a meeting where you can decide on the best course of action. Get in touch with people who negotiate for a living and get sound advice from them. Remember that a global arbiter does not come to your rescue when you are at the death line of the debt settlement option.