Negotiate Debt on your terms
Getting better terms for your debt can be a tricky proposition, especially considering there are several options available to you. Also, the type of debt you have will dictate the best debt negotiation tactic to consider. For instance credit card debt is considered unsecured meaning that it’s typically impossible to get rid of all it unless you qualify for Chapter 7 bankruptcy. If your debt is considered secured such as a car loan you typically have to come to some sort of agreement to either pay the creditor most if not all of it back or you lose the asset, in this case, the car.
Using a bankruptcy attorney
A bankruptcy attorneys sole job is to negotiate debt for their clients. There are usually major credit ramifications that will drastically lower your credit worthiness and make it almost impossible to get a loan for a while. It could be years before your credit score will be high enough to qualify for more favorable, if any, terms for a new loan.
Work with your creditors
If you find yourself in a position that you can’t pay your debts your first strategy should be to work directly with your creditor to try to find an amicable solution. That does not mean that your creditor is going to want to hear anything you have to say. Especially if you are current on your payments they will typically not negotiate.
Settling your debt with your creditors
However, once you are delinquent your creditors will now see that you either can’t pay what you owe or you won’t. They are now in a position of possibly not getting paid at all. If the debt in unsecured they will usually be much more willing toconsider a favorable debt negotiation scenario. You may even be able to settle for much less than you owe. In extreme cases debt has been settled for 5 – 10 cents on each dollar owed.
Negotiating Secured Debt
Secured debt is usually attached to a physical asset that cannot be settled on as the creditor can simply take the asset back for non payment. However in the case of a car loan you are responsible for the debt remaining after the asset has been taken back and sold.
Hiring Debt Negotiators
You can try to negotiate with your creditor directly or hire a company to do it for you. Make sure to do your due diligence if you hire a debt negotiation service because unfortunately there have been a lot of shady companies out there ripping people off. That doesn’t mean there are not really good companies just do your homework. If all else fails you can always look to bankruptcy as an option.
Whatever debt negotiation strategy you chose it will most likely not be easy so take a deep breath and know that you’ll get through it.