Negotiating with Creditors 101: How to Settle Debt on Your Own

Debt is easy to get into but hard to get out of. And if you have creditors or debt collectors constantly calling you about a balance you’re unable to pay in full, the light at the end of the tunnel can seem to get further away with every ring.

This is the point where many folks dealing with financial hardship give us a call to explore their debt relief options. Often these callers ask us whether they can negotiate directly with their creditors without going through us. The answer is yes—you can DIY debt settlement without the support of a debt relief company.

The main benefit of negotiating with your creditors on your own is that you won’t have to pay fees to a third party working on your behalf. At ACCS, while our program does include fees in exchange for our services, we only collect them as each settlement is achieved successfully.

If you are considering this DIY route, it is important that you have a complete understanding of what it takes to settle your debts on your own. This is why we’ve put together this five-step guide for approaching the debt settlement process.

Step One: Put it ALL in Perspective

It may seem like a no-brainer, but the first step in working toward debt settlement is to figure out the precise amount of debt you’ve accrued. When you’re in debt, what you owe can seem like an overwhelming amount that’s looming over your head. The anxiety this causes may leave you with a sense of dread and despair. However, by pulling out your bills and grabbing a pen, some paper, and a calculator, you’ll be able to put it all in perspective. Armed with the specifics of your situation, you can set the matter-of-fact mindset you’ll need to negotiate.

Step Two: Decide if Debt Settlement is Right for You

Just like choosing a job or a school, what works for one person in terms of tackling debt may not work for you. Generally, DIY debt settlement works well for people who:

  1. Have debt that is already 90 days or more delinquent
  2. Can keep their cool in stressful situations
  3. Have time to dedicate to the lengthy process
  4. Are comfortable haggling over dollar amounts and negotiating the terms of a settlement.

While most people who pursue debt settlement on their own have delinquent debt, not everyone has the attitude, time, or confidence necessary for a successful settlement outcome. This is where partnering with a company specializing in debt settlement—like ACCS—can be helpful. Because these organizations negotiate with collection agencies and credit card companies each day, they know how to approach the situation to get the best settlement offer for you. A creditor is likely to listen to and agree with the carefully-crafted settlement agreement your hired experts create.

Step Three: Determine the Arrangement

So you’ve decided to try DIY debt settlement—now what? Before picking up the phone, it’s important to have a plan in place. Debt settlement negotiations boil down to two factors:

  1. How much you can pay
  2. How you will pay it

There’s no holy grail formula to determine the payment you propose to your creditor, but you should take into account how much you owe, how much money you can reasonably offer, and how long the account has been delinquent when coming up with your proposal.

You’ll also want to decide if you want to pay your creditors in installments or if you’re comfortable with one lump-sum payment. It’s a smart idea to have a few counteroffers ready as well, as it’s likely that your creditors are aiming to get the best deal possible. Consider creating a range of payment options from one “lowball” amount up to a middle ground. If you know the highest you can pay back is around 60% of your original debt, for instance, begin your negotiations by offering around 35% and work your way up from there.

Step Four: Take the Leap and Make the Call

After you’ve mapped out your ideal settlement, take a deep breath and get ready to pick up the phone. Negotiating with creditors requires persuasion and persistence, so be prepared to play a lot of phone tag. If you’re working with a debt resolution company, it’s likely the number of calls you’ll receive from collection agencies (and the number of calls you’ll have to make to them) will decrease dramatically. An expert debt specialist can drastically cut the amount of time this negotiation process takes and will likely attain a much lower settlement for you. This will save you significant time, financial resources, and effort.

If you’ve decided to go at it on your own, your results can vary widely. You might be able to settle the debt in one call, or it may take a few dozen calls to come to a solution both you and your creditor can agree on. During the call, it’s a good idea to take notes on who you talked to, when you spoke, and the details of the conversation. Not only will this help you in future negotiation conversations, but it will also give you a documented record of the steps you have taken in case you ever need it.

Approach the conversation with a concise story in mind. Though the person on the other end of the line doesn’t need to know the nitty-gritty details of your debt, it may help them to know that you’re facing financial hardship and the steps you’re taking to get back on track. Have some talking points summarizing your situation prepared in advance and keep them consistent between calls.

Step Five: Get it in Writing

Congratulations! After months spent on the phone, long nights poring over budget spreadsheets, and honing negotiation skills a high-powered attorney would be proud of, you’ve finally settled your debt. But before making a single payment, it’s critical that you lay out the terms of the settlement. You’ll want to spell out what was owed, what you’re settling the account for, and how it will be reported in an official document with your creditor. Getting the agreement in writing gives you the peace of mind that comes with knowing the terms of your settlement can’t be abruptly changed.

Dealing with creditors takes a lot of time and energy, which is why many people decide to get the support of a debt resolution company like ACCS. If you’re uncertain as to whether you can handle debt settlement successfully by yourself,  request a Free Debt Relief Evaluation from us. Our dedicated team of debt specialists will take the time to listen to your unique financial situation and find the debt solution that is right for you. With ACCS on your side, you can simply focus on making one affordable monthly program payment while your dedicated debt specialist does the heavy lifting of negotiating with your creditors.

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