How to Negotiate Debt Payoff

If you're deeply in debt, or even have a moderate amount of debt, paying it off should be high on your list of priorities. Being in debt means you're likely paying plenty of money in interest, which keeps you in the tight noose of creditors. Negotiating a debt payoff plan is a first step to becoming debt free. It might take a little work on your part, but will be worth it when you write that final debt payment check.

Instructions

1

Gather together any statements that you have from various creditors, whether they are from credit cards, home removations, store cards or any other debt. Calculate the amount you owe each creditor.

2

Call each creditor and ask if it will settle for a lower, lump sum payment instead of a higher and more drawn out payment process. As a general rule, try and negotiate 50% of the amount you owe to start as a lump sum payment. You can also negotiate for removal of late fees and penalties. Many smaller creditors will choose a lower lump sum payment.

3

Find out the statue of limitations for your state. As you near the statute of limitations (the amount of time that a creditor is allowed to attempt to collect a debt from you) your creditors will be more likely to try and settle the debt with you.

4

Keep calm during the negotiation process, otherwise your creditors will sense your desperation and will be less likely to negotiate a debt settlement. Be polite and courteous and keep your statements handy so you can show your creditor that you are knowledgeable and organized.

5

Report a settlement to all of the credit reporting agencies so that they can mark the debt as settled and adjust your credit score accordingly.