Can you really negotiate debt on your own and succeed at doing it? Based on present circumstances, there is a high chance that you will need to talk to your creditor or lender about your credit obligations.
According to reports, the coronavirus pandemic led millions of people to file for unemployment. With everyone being forced to stay at home, the economy was left at a standstill. There was hardly any economic movement unless it was to buy food and essentials. But other than that, the entertainment, travel, tourism, and other industries have suffered massive losses. And it led businesses to either close down or let go of some employees.
When people start losing their jobs, personal problems start to magnify. With our debt levels higher than the peak of the last recession, you know that a lot of households are in trouble. How can you afford to pay off your debts if you lost your job?
As scary as it may be, you don’t have to worry. You are not as helpless that you may think. But before you can decide on what to do, you might want to ready yourself to negotiate debt.
5 things you need to say while you negotiate debt
No matter what you plan to do to deal with credit problems in the midst of a financial crisis, you need to start by communicating with your creditors and lenders. You have to discuss with them your predicament because there’s no way you can stick to your usual payments. And obviously, you cannot ignore your debts. Because doing so will make things worse for you financially.
That means you don’t have a choice. You have to set up a new arrangement with your creditor. And that means you have to be ready to negotiate debt somewhere in your conversation.
To do that, there are 5 things that you need to say while you are talking to them about your debts.
After the pleasantries are done, you need to discuss the problem. Don’t beat around the bush. Just be honest with what’s going on and why it is making it hard for you to meet your monthly payments as usual. You don’t have to dump all your complaints about life being unfair. Stick to the facts. Did you lose your job? Are you forced to close up shop because of the pandemic? Or is there an illness that’s keeping you from earning as much as you used to? These are all valid reasons that could have affected your ability to make payments.
Once you have explained the problem, you should also list the actions that you have done to try and remedy the situation. The creditor has to know that you are doing your best but you are still coming up short.
Before calling, you should have done a thorough research of solutions that you can use to help solve your credit troubles. If you have to negotiate debt, you need to be ready with your proposals. These will be part of your arsenal. After all, if the creditors see that you have done your research beforehand, it shows that you are sincere. It also shows initiative and a willingness to do what it takes to meet your credit responsibilities.
When you discuss your solutions, be honest with how much you can afford. If you will negotiate debt payments, it should be based on a comfortable amount that you can meet. Start with the lowest amount that you think they will approve – and not the highest amount that you can afford. This will give you room to negotiate your payments. You should also indicate if this arrangement is permanent or only until you have gone past the financial crisis.
After the solution, you need to provide proof that you really need them to approve your proposal. For instance, if you lost your job, you can provide documents that you were laid off. Or if a medical illness rendered you unable to work, you can provide the medical documents to prove it. If you can show your creditors or lenders proof that your payment capabilities are really compromised, it should be easier for you to get approval.
The next thing that you need to discuss is getting professional help. Some people think that professional debt relief help only involves credit counselors or debt negotiators. But the truth is, you can also ask help directly from your creditors and lenders. For sure, they will give you free service. And they usually have programs in place that can help you meet your goals. So it’s an option that you should really consider.
But beyond that, asking the creditor for help will make them feel more in control of the situation – even if you are trying to maintain it. Just ask them, given the circumstances you have described, if they have something that can make things easier for you. Whether it’s waiving fees or lowering the interest rates, you should ask what they can offer. If you don’t ask, you won’t know if they can agree to give it to you.
Finally, end the conversation by reminding them of your positive traits. If you have been meeting all your payments or you have been using their account for a long time – remind them of this. If they realize that you are a loyal client, they will most likely value you. They will exert an effort to keep you as a customer. You have to take advantage of this. Anything that you can use to get the approval that you need to make your payments easier to meet.
In all of this, you have to expect that the creditor or lender will negotiate back and forth with you. If they try to renegotiate a new amount, don’t agree if you can’t afford it. If they agree to your proposal, make sure that you will commit to your payments. You gave the proposal – or you agreed to it. It’s only fitting for you to meet the payments.
Keys to negotiate debt successfully
When you are trying to negotiate something, your attitude can influence the direction of the conversation. This is why you need to make sure that you have the right disposition before you talk to your creditors or lenders to negotiate debt.
With the devastation that this coronavirus is giving us, it’s hard to have a positive view on anything. In one survey, it is revealed that a lot of people are worried about how their lives will change. Almost 7 out of 10 respondents expressed their concern over their personal finances. It is not just the health that is causing them concern. They also worry about the economy, job security, and their credit situation.
While it may be hard to stay positive, you need to make sure you have the right attitude when you talk to the creditor or lender. But what should you do?
First of all, make sure that you are honest. There is no point in lying because if they find out you are not being truthful, it will not bode well for you. So just be honest with what is going on in your life that is causing you to negotiate debt. That will help cut to the chase so you can work on solving the problem immediately.
It is also important for you to remain polite. Remember, you are the one trying to ask them to approve your proposal. Do not demand that they agree with you. Make sure it comes out as a request. They will be more cooperative if you approach them with politeness and respect.
While you are honest and polite, you should also be firm. You may be asking something from them, but you also have to stick to what you can afford. Be firm with what you are asking. Because if you agree to an amount that you cannot commit to because you can’t afford it, then you will be in trouble. It will give the creditor or lender the power to ask higher fees from you.