4 Strategies for Negotiating with Creditors

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If you are dealing with overwhelming debt, negotiating with creditors can be one way to successfully reduce the amount you owe. However, negotiating with creditors is not an easy task. Our New York debt relief attorneys have put together helpful tips to negotiate with creditors strategically.

#1: Get Organized & Informed

Negotiating with creditors can quickly go south if you don’t have all the information needed when making the call. You should gather all relevant information to your debt, such as the:

  • Original loan agreement
  • Payment history
  • Late payment notices

If you are missing documents, you can usually ask your creditors for copies.

#2: Determine What You Can Afford

Before making the call to your creditors, you should determine how much you can afford to pay. You should look at all of your necessary expenses and bills, and if there has been a major change in your expenses, you should factor that into the equation as well. Once you’ve determined your living expenses, you should calculate how much disposable income you have by subtracting your expenses and bills from your income. Hold on to this number for creditor negotiations.

#3: Aim to Pay 50% or Less of Your Unsecured Debt

If you try to settle your unsecured debt, you should aim to pay 50 percent or less of the amount you owe. Creditors may offer you a reduction of interests, an extension of your loan by decreasing monthly payments, etc. Although it might take time to get your debt amount reduced, you may be able to come to an agreement.

#4: Have Cash on Hand to May Payments Soon

Creditors might be more likely to settle if you can transfer the payoff amount immediately. Creditors often prefer to get money right away rather than wait for multiple smaller payments over time.

Contact our New York debt relief attorneys today at (516) 217-4488 to schedule a consultation!