How To Negotiate With Creditors

Speak with a decision maker: If the person who answers is not a decision maker: explain that you are behind in your payments, that you have a proposal to make, and that you have been advised to only speak with a person who has authority to make a substantive decision -- which you assume is a supervisor. If your situation has to be repeated by someone else to the decision maker: you will be a story rather than a person, you will not be sure that the points that you want to emphasize will be emphasized, or what additional points the reporter will tell to the decision maker.

Find out with whom you're speaking: First get the person's name and direct number if possible, and any other information they are willing to give you. Write the information down.

Explain the situation, without going into unnecessary detail. (Consider rehearsing what you want to say before you make the call.) Unless there's a solid reason not to, tell the creditor about your health condition, how it resulted in a reduction in your income, and unexpected increases in your expenses. Consider offering to send a copy of a letter from your doctor describing the generalities of your condition on the understanding that they will keep the information confidential. (So the creditor will know you're telling the truth.) The sympathy factor alone might make them more agreeable. Also, consider mentioning -- in a non-threatening manner -- that you are thinking about filing for bankruptcy (which would wipe out the debt entirely.) If you have a good payment history with the company, mention that as well.

Explain the situation in a manner that indicates that you are a prudent person, but that events overtook you.

Don't ask what the creditor will accept. Instead, let the creditor know you have a realistic plan to propose that will allow you to keep your account current while taking care of the other aspects of your life.

Be specific in your proposal. See above.

If the creditor says "no": Ask what it would accept. If the creditor continues to say no, see the next section below.

Once the monetary discussion is resolved:

• Ask for a change in your credit report. Ask that the creditor change the notation in your credit report with all three major credit bureaus to show that once you make payment, all mention of prior delinquency will be removed and it will show that you are up to date.
• Don't make any payment until you get a signed agreement. Let the person with whom you reach an agreement know that you are not making any payment until the agreement is reduced to writing and they sign it. You can prepare the letter. (See "When You Reach An Agreement" below).
• Make notes. Either during the conversation, or immediately after you hang up, make notes about the conversation, including with whom you spoke, a direct phone number, what was said, and what was agreed to.

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