How to Win When Negotiating Credit Card Debt

When you get into debt and the creditors start calling, life can become wearisome. Unfortunately, many collection agencies reduce themselves to using scare tactics and threatening people who are all ready having a difficult time just making ends meet. Usually the debt collectors are willing to negotiate, but there are a few steps you should take during these negotiations to protect yourself.

Difficulty: Moderate

Instructions

1. When negotiating credit card debt or any debt, never let the debt collectors intimidate you. They will try to play for your emotional response and they might threaten to sue you, clean out your bank account, or make you feel like a bad person for your debt. You do not have to take it. Calmly tell them that they can call back when they are ready to be respectful and talk the situation over like two grown ups then hang up. Whenever you talk to them and they start the scare tactics again, just hang up. You do not have to deal with that abuse.

2. Start putting back as much money as you can to pay off the debt. Sell whatever you really do not need and set aside a little bit from each pay check for the debt and do not touch it. Set up a separate bank account if you have to, but always remember that the money is to pay your debt and take you on the path to being debt free.

3. Once you have saved at least half the the amount that you own on the debt, talk to the collector. Tell them how much money you have and ask them if they are willing to do a debt settlement with amount that you have as payment in full. If they will not, then tell them that you will talk to them later. Keep trying the offer until someone accepts it. You may have to offer a little more than half if they are being stubborn. When they are willing to take the debt settlement, ask them to send you a letter stating that they will take the money you have and the debt will be clear. Do not send them any money until you have received that letter.

4. Once you have the letter from negotiating the credit card debt stating that they are willing to take the amount you are offering as settlement in full, send them a money order, cashier's check, or personal check in the mail with a return receipt requested. That way if they claim that they never received your payment, you will have proof that you did and they did get it. Never give them direct access to your banking account and do not give them your personal information over the phone. They could clean out your account if you do so.

5. Once you have gotten a statement from the postal service saying that the debt collection agency has received your payment, keep it, the letter saying that the agency was willing to take your offer as settlement in full and the bank statement showing the money transfer and paperclip them together. Put them in a safe place and keep them for forever. That way, if the collection agency ever calls and wants a payment on that debt, you can fax them a copy of the entire transaction proving that you no longer own anything on that debt.