Unfortunately, landing yourself in debt could have an adverse impact on your life. One of the most notable is the way it affects your credit score and prevents you from obtaining loans, moving into certain types of housing, etc. Fortunately, it’s possible to leverage settlement negotiations in order to reduce the amount that you owe.
Let’s take a look at what you need to keep in mind.
Keep Your Rights in Mind
Interestingly, many people who are looking to negotiate their debt are unaware of the rights that they have. When speaking with a debt collector, they are not allowed to harass you or otherwise speak aggressively.
They also can’t lie to you, threaten to arrest you, and they can’t call you outside the hours of 8 AM and 9 PM. If your debt collector exhibits any of the above behavior, you should report them to the Consumer Financial Protection Bureau.
Alternatively, you could also report them to your state’s attorney general.
Hardship Programs
Depending on the circumstances of your debt, you may be able to complete a hardship program to help reduce your payments. In general, the people who are eligible for this option rely primarily on the state or federal government for their income.
In fact, many debt collectors will voluntarily stop contacting you once they learn that you fall into this category. Be sure to convey this information as soon as possible if it applies to you.
Consider Paying a Lump Sum
One of the most efficient ways to negotiate debt is to offer to pay a lump sum. This method works since your debt collector will be far more satisfied with a partial repayment instead of receiving nothing at all.
Depending on how much you are able to pay, you may even have a chance of wiping your debt out entirely with a single payment. In other cases, you may be able to take advantage of a revised payment plan after you pay the initial amount.
Of course, you should ensure that you do not default on this new plan.
Keep Your Cool
Negotiating debt can be a frustrating process. This is especially true during times of intense financial hardship.
However, it’s essential that you remain levelheaded during negotiations. Acting emotionally will make it far less likely that debt collectors are willing to compromise with you.
Fraudulent debt collectors may even use this as an opportunity to try and convince you to claim that that isn’t yours. So, keep this in mind before you speak with the other party.
Properly Using Settlement Negotiations Can Seem Difficult
But, it is a tactic worth pursuing in many circumstances. The above information will help ensure that your settlement negotiations go as smoothly as possible.
Want to learn more about what we have to offer? Feel free to reach out to us today and see how we can help.
