When facing debt, the constant barrage of creditors calling and collectors visiting can become too much for one person to handle. There may come a time when it is actually helpful to flip the tables and call your creditors instead. By doing this, you can pursue debt negotiation with the hopes of reaching a debt settlement. Proper debt negotiation can actually allow you to avoid things like bank levies, foreclosures, and wage garnishment.
Debt Negotiation Strategies
When pursuing a debt settlement, there are some particular strategies that would benefit you to follow. Three in particular, the bankruptcy angle, the cash angle, and the 50 percent angle, will be examined here. The biggest asset in either of these options is having professional representation. A Dayton bankruptcy lawyer can review your options and assist you in your debt negotiation efforts.
The bankruptcy angle is a debt negotiation strategy that will often coax a creditor into a more favorable debt settlement. By telling the creditor that you are close to filing for bankruptcy, you are likely to get their attention. Creditors do not want to go down the bankruptcy road and they may become more flexible because of it. Because of the fact that unsecured debts in chapter 7 and chapter 13 bankruptcy are usually discharged, creditors will be willing to reach a debt settlement before it gets that far.
The cash angle is another good debt negotiation strategy. Creditors are always excited by the opportunity to immediately pay off a debt. If you can get hold of a lump sum of cash and use it as leverage, a creditor is likely to listen. Even if you don’t have cash to pay off all of the debt, a creditor may eliminate some debt for the sake of fulfilling a portion of it.
The 50 percent angle refers to a strategic negotiation tactic that can be used when talking with creditors. The goal is to start low, agreeing to pay off somewhere between 10-25% of the debt. By starting low, you are giving the debt negotiation room to grow. Your goal should be to end up paying off 50% of the debt, something creditors will usually accept when they expect a bankruptcy is around the corner