Negotiating With Creditors and Debt Collectors: Tell Your Story

Negotiating with creditors and debt collectors on your own is a daunting task. But if you approach the phone call prepared and calm, you may just reduce your debt. Successful negotiation means that you succeed in avoiding foreclosure, bankruptcy, garnishment, bank levies, etc. But before you confront your collectors and creditors, go over our tips for telling your story.

Because, after all, every conversation is both a negotiation and storytelling. You need to be able to convey your life situation concisely, but without overdoing it. Of course, being truthful is a must.

Without further ado, here are our tips on negotiating with creditors and debt collectors.

Prepare Well

So, you need to tell your story in a convincing manner. But to do that, you should get your paperwork in order before the crucial negotiation phone call, and you should learn as much as you can about your debt. The creditor or debt collector that first contacts you needs to give you specifics about the debt. They can do so over the phone, or in writing within five days of first contacting you.

The minimum information you need is:
● The creditor’s name.
● The owed sum.
● The notion that you are allowed to argue on the debt or ask for the name and address of the initial creditor (if it differs from the current creditor).

Another thing to note is that you should keep track of who you spoke to and when. Meaning, each time you talk to lenders and collections agencies, grab a pen and paper to write down the most important information.

Creditors vs. Debt Collectors

Another tip is to adjust your strategy in regards to who you will be talking to. Negotiating with creditors is not the same as negotiating with debt collectors. While both can come to an agreement with you, they do have different priorities.

Creditors are easier to persuade, especially if you tell them that you put some money aside for the debt agreement. They may be willing to meet you halfway, since their only other option would be writing off the debt as loss. On the other hand, collection agencies are a harder nut to crack. It may take you several attempts to come to a mutual agreement. Still, they may be lured into a settlement, since they don’t need you to pay off the whole debt amount to reap profit for the agency.

Negotiating With Creditors: Be a Storyteller

The person on the other end of the line doesn’t have the time to hear your life story. But you should still find a way to weave them into your situation. So make sure you concisely tell them about your financial hardships. Let them know how hard you are working on getting back on your feet while giving them the specifics that led you to where you are now.

You may come across an impatient creditor or collector, but they do need to be in the loop about your unique situation which landed you in your current financial spot. So don’t overdo it, but let them in on the details.

Avoid a sob story, but do keep it real, and don’t avoid telling them the blunt truth.
● If you were ill, don’t hold back. Tell the person on the other side of the line how long you were out of work due to illness and what you’re doing to get back on track.
● In case you got fired, and you had only your spouse’s paycheck to take care of a household of five, let them know. Explain what you are doing to find a new position.
● If the pandemic caused your small business to close down, tell it as it is. It’s important for the creditor to understand the situation was unexpected.
● If you were forced to take a pay cut, explain its circumstances.

Keep Calm and Consult an Expert

Finally, you can’t go wrong with the golden rule of staying calm. If you convey your unique citation well enough, you may reduce your debt. Nevertheless, achieving that the DIY way is extremely hard. There are credit specialists that are well-versed in such situations and can even coach you on how to repair your credit score via debt negotiations. White, Jacobs and Associates is one of the top players in this field, and their team offers free counsel to those who want to get their buying power back.