The phone rings, and before you even look at the caller ID, you instinctively know it’s a creditor calling. Panic sets in as you begin to internally debate whether or not you should even bother picking up the phone.

Money is already stressing you out, and the thought of trying to reason with them when you can’t afford your minimum payment is overwhelming. Your natural inclination is to wonder: “What good could come from answering this call?” The answer is that if you do decide to pick up the phone, you may be able to negotiate your debt to a lesser amount than what you owe.

The thing about debt collectors is that they don’t necessarily need to collect every cent of your debt to make a profit for themselves. They may be willing to negotiate so that they can avoid writing your debt off as a complete loss. Naturally, if you’re going to try negotiating your debt, there is a level of tact required. Here are some tips on what you should do to encourage a smooth debt negotiation process.

Related: Top 5 Ways Debt Collectors Cross the Line and How to Handle Them

Keep it Simple

Be honest about your current situation, but keep the conversation focused and avoid rambling on too much when you’re negotiating with a creditor. You are talking to a business professional, not a friend, and divulging information such as how much your assets are worth or concocting a false story could do more damage than good. The person calling you needs to get a general understanding of your situation, but you can spare them the emotional and financial details.

For the collection company to consider a debt negotiation, they only need to know what your specific situation is. It’s helpful to create a brief go-to summary that you can repeatedly use when you pick up the phone to speak to creditors. The structure of your speel should be about how you fell into hardship and what you are doing to get back on track. You can say something like “I was laid off, and my wife took a heavy pay cut. I’m looking for a new job, but we do not currently have the money to pay anything right now.”

Having a go-to speel can help you keep the emotion out of the conversation and focused on the goal of negotiating your debt.

Keep it Professional

Do your best to stay calm while you are on the call. Before you get into the details, it may be helpful to ask the creditor to use a recorded line. This way, they are more likely to stay professional and well-behaved. However, this means that you too must be on your best behavior. Do not yell at the creditor or use profane language. If you find yourself starting to lose your temper, tell the collector you need to call them back at a later time and call back when you have regained your composure.

Keep Records

For each call take detailed notes. Write down:

• The name of the contact you are speaking to

• The date and time of the conversation

• The topics discussed

• All threats that are given

• All verbal agreements

If a collector threatens you and says you will lose your property, or that you are going to be sued remain calm and ask for details. You can ask for further information about things such as when the bank will be withdrawing funds from your account when you should expect to receive a formal notification of a lawsuit, or when your property will be confiscated.

It’s also essential that you read and open the mail you receive from your creditors. Keep this mail along with your phone call notes in an easy to access the file.

When you and the creditor come to a payment agreement, be sure to ask for the arrangement in writing before you pay anything. This will ensure that if there is ever an issue with the terms, you have written the proof of the original agreement.

Sometimes creditors utilize empty threats as a scare tactic. This is illegal, and if a law is broken in the attempt to collect your debt, you will have the records to prove it.

Related: How to Rebuild Your Credit After Debt Settlement

Keep Your Budget in Mind

Have a good sense of what you can and cannot afford. It would be smart to create a spreadsheet of your monthly income, bills, and spending. This will give you a visual of what money you have available to use as payment. It will also help you see if there is any flexibility in your budget and if certain spending can be rerouted to the payment of your debt.

If you do come to a negotiation, do not agree to an amount that you cannot realistically pay. It’s in your best interest to pay a single lump sum rather than a series of monthly payments. Monthly payments may sound like a better option, but you will most likely end up paying more over time with accrued interest.

If you agree to a payment plan, note the total amount you will be paying. Depending on your full credit profile, paying less than your full debt amount may end up damaging your credit score. However, a payment agreement is better than letting the debt go unpaid, as this could result in your debt being sent to a collections agency. This will damage your credit, and your wages or assets could be garnished.


Keep Creditors a Priority

Try to work an agreement with your creditor before they send the bill to collections. Paying a small amount towards your debt each month before you come up with a payment arrangement does not mean that your bill will not be sent to collections. Late credit payments will affect your credit score, but having your account turned over to a collection agency can do considerably more damage.

Late payments can haunt your credit report for up to seven years, while Collections accounts can remain on your report for over seven years from the date of the delinquency. It’s important also to note that paying off your late accounts will not improve your credit unless a creditor authorizes the removal of the late payments on your credit report.

If you are unable to negotiate your debt on your own, you can find out if you are eligible for assistance from one of our Senior Analysts at Alleviate Financial Solutions.

Once your debt is settled, you can begin to build your credit back up. Avoid any further delinquent payments, and your credit score should continue to grow.


In conclusion, negotiating your debt may be a possibility for you. Staying calm throughout the process is critical. Do not yell at the representative, as this will reflect poorly on you, and could hinder the representative’s willingness to assist you. Take detailed notes and be sure to keep all paperwork associated with the debt collection in its own easily accessible file. If possible, deal with your debt before it is sent to a collections agency, and if you need assistance to seek out the aid of a credit counseling agency.

Speaking with a creditor is not fun, but it does not have to be hard. You’ve got this! Next time they call, will you be ready?


Schedule a free consultation today for a risk-free debt assessment. The only thing you have to lose is your debt.