How to Negotiate a Discount on a Debt

There are many reasons why you might find yourself in debt. You might have unpaid medical bills, student loans, credit card debt, or maybe you haven't been able to work because of an illness or injury. If you're buried in debt, you may think your only option is to file for bankruptcy. But you always have the option of negotiating with creditors to try to get a discount on your debt.

Instructions

1

Stay calm and collected. When dealing with creditors, it's easy to get overwhelmed, upset, or even hostile. Creditors aren't usually nice to people in debt, and they may use scare tactics, such as threatening to take you to court. Don't let the creditors get to you. Stay calm, and simply let them know that you don't have the amount of money they want you to pay.

2

Don't talk to creditors about negotiating your debt over the phone. You should only communicate with creditors by mail. This eliminates the possibility for arguments and allows you to calmly collect your thoughts before communicating with creditors or agencies. Creditors can use tapes of phone conversations against you in court, and if you lose your temper, it will hurt your case.

3

Avoid accepting the first or even the second offer you receive from a creditor or agency. Remember that you have the upper hand in the situation because their only objective is to get paid. Once you decide how much you can afford to pay, hold out until they agree to your terms.

4

Threaten to file for bankruptcy. Even if you have no intention of filing for bankruptcy, such a threat often leads to a significant discount on a debt. This tactic works because if you file for bankruptcy, the creditor or agency gets paid nothing. However, if they work with you to bring down your debt, they will get paid something.

5

Ask someone else for help. If you're not the negotiating type, seek the help of a trusted friend or family member. This usually involves faxing the creditor a power of attorney that gives your friend or family member the authority to negotiate on your behalf.