How To Negotiate With Creditors

Write a letter to the creditor by certified mail, return receipt requested, confirming your agreement. Keep a copy for your records. A sample letter that may be useful follows. Don't make the agreed payment until you receive the executed document.

Once you have an agreement with one creditor, you can then use that agreement when you speak with other creditors. No one likes to feel alone, and many people don't like to be the first to agree to something. However, if they believe that others have already agreed, and that if they do not agree they may have to wait a very long time to get their money, if at all, they are more likely to agree to your request.

Revise your budget so you can see what is left to work with.

If you haven't received a signed agreement within one week of sending it, call your contact person and ask what is the reason for the delay. Remind her that you are waiting to satisfy your side of the agreement, but need the signed agreement. Follow-up every week until the matter is resolved.

Stick to the agreement. If you can't make a payment, let them know beforehand --- they will be more likely to continue to be flexible.

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