4 Steps To Negotiate With Debt Collectors

By Author: J.J. Yong
Total Articles: 962
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Negotiating with debt collection agencies is always more challenging if compared with dealing with original creditors. However, in order to save hundreds or even thousands of dollars, you need to get yourself ready to bargain with the collectors so that your life will not be full with non stop phone calls chasing for payment.

Let me show you the proper steps of negotiating with the debt collectors:

Step 1:

Determine how much your total outstanding balance is. You are advised to refer to the latest statement sent from the debt collection agency. You need to do separate calculation on 2 items. The first item will be your actual debt excluding interest rates and any fee. The second item will be the total interest and the late fee charges. At the same time, find out the "age" of your debt. If the debt is still new, say less than 6 months, there is less space for you to negotiate. You need to be clear of your debt details before making any offer.

Step 2:

Assess your financial situation carefully. You need to figure out how much fund you have on hand to settle your debt ...
... one time off. In general, in order to get rid of the debt successfully, the debtors are required to pay off at least 60% of their total debt. If you don't have enough cash, you are reminded to raise fund first before contacting your collection agent.

Step 3:

Start calling your collector personally. You are required to find out the exact person who has real authority on your case. Talk to the person directly. Start your negotiation process with very low offer since there will be some back and forth before final agreement is made. You need to brief the collector about your financial hardship.

Step 4:

Once the settlement proposal is agreed by both parties, you are reminded to get a written agreement from the debt collection agent. If you are not sure about the legal effect of the agreement, it will be good if you can get a lawyer to examine it first before signing. You must make sure that your debt is settled completely.

Last but not the least; bargaining with debt collectors needs patience, courage and knowledge. Before communicating with them, you should know your rights as a debtor first. Hence, you had better go through the Fair Debt Collection Practices Act carefully so that you can protect yourself from being "bullied" by the collectors.
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