Negotiating with creditors is a stressful job. You might have spent months dodging their phone calls and avoiding their intimidating letters about there being consequences if you don't pay your debts. Luckily, there are some ways that you can get the creditors off your back by settling them with an amount that will be more advantageous for you. Follow these tips to reduce your debt quickly.
1. If You Come Into a Large Sum of Money, Contact Your Creditors
If you somehow come into a large sum of cash unexpectedly, use it to settle your debt with one of your creditors, even if you owe double the sum of the amount that you currently have. This works best if you have not been able to pay your debts for several months. Call up the creditor and explain your situation and tell them that you suddenly have this sum of money. Make sure that you don't have this money in your bank account, because the creditor might try to seize it.
Instead, keep it in cash with you while you're on the phone. Offer to pay them the entirety of this sum in exchange for having the rest of your debts dropped. Offer to make the transfer right away. Consider calling the creditor when you're outside the bank for added authenticity. The creditor will be more likely to go for a sum of money that is guaranteed, rather than many different small payments over time.
2. Always Negotiate For Less Than Fifty Percent
If you owe a large sum of money and have a history of being able to pay it, try to negotiate with your creditors to a sum that is less than 50% of what you actually owe. The majority of unsecured creditors will settle for a much lower amount than what is actually owed. When you start your negotiations, start extremely low, between 10% and 20% of your debts. Gradually work up and settle for the lowest amount that your creditors offers, as long as it is below 50%.
3. Hint That You're About To Be Bankrupt
Finally, you want to make sure that you hint that you're about to be bankrupt. The creditor understands that he or she will be able to get more money from the debtor before the debtor declares bankruptcy and will often be much more willing to settle for a reduced amount.
For more information, talk to a debt settlement lawyer, such as one from Vine & Williams Debt Management.