How to Renegotiate Debt

Renegotiating your debt can help ease your financial burden and bring some relief. There are three ways to renegotiate a debt, according to New Retirement. You can renegotiate for a lower interest rate, a different payment schedule or to take some money off of the total debt. There are no written requirements for debt renegotiation, according to CNN, and decisions are usually made on a case-by-case basis.

Instructions

1

Know your situation. Get your paperwork together and find out how much you currently owe, what your current interest rate is and how much you are paying each month. If you want to lower your interest rate, check your official FICO scores and credit reports, too, at the MyFICO website.

2

Make a budget to determine how much you can pay each month or as a lump sum, if renegotiating for a settlement. For monthly payments, know how much you would need to lower your interest rate in order to reach your monthly payment goal.

3

Use the information from your FICO score to find out what type of interest rate you have a shot at getting. Do this by searching for the current average interest rates for the type of debt you have and what interest rate you need to get it. Depending on the type of debt, you might be able to do this directly on the MyFICO website or on Bankrate.

4

Call your lender. Explain your situation to them and let them know that a renegotiation is the only way that you are likely to be able to keep up your payments. A renegotiation might be more attractive to them than a default or bankruptcy. According to CNN, if you are over 90 days late and you still don't have the money to get your payments current, you might have a good shot at a debt renegotiation.

5

Try again until you get the answer you want. You might not get it the first, second or even third time; but that doesn't mean you won't get it at all. This is especially true if you are renegotiating the balance. If you want to renegotiate for a debt settlement, the closer your debts are to being charged off by the original lender, the easier it might be to get a better deal in your favor, according to Bankrate.