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Negotiation TipsAn important aspect of credit repair is the settlement of unpaid collections. Often, by appealing to a creditor's sense of fairness, you will be able to negotiate a deal that is in your best interest. For example, if you owe a creditor money, but can't borrow funds to pay off the bills because the creditor has damaged your ability to get further credit, the creditor may be swayed to remove the negative report or have it reduced to a less serious, non-evaluating status, which would allow you the opportunity to get enough money to pay your debt. Ask your creditor "do you delete?" This is collections lingo that means to delete the item from the credit bureaus as a condition of payment. If the creditor agrees, and it happens all the time, you'll both be winners! At this point enter into a discussion to determine how much you will actually pay them to settle the debt. However, don't pay a dime unless they agree to delete the item from your credit report. When working with a creditor or collections agency remember that if you don't pay the bill they don't get paid—so be sure to get the results you want before sending in any money. You can settle the debt for 30-75% of the original amount due, depending on how old the account is. You can increase the success of your negotiation by coming armed with some valuable information, the statute of limitations to sue over a debt in your state. If the statute of limitations is up, the creditor will not be able to initiate a lawsuit to collect on that debt, or subsequently place a lien against any property. Whenever you negotiate a settlement agreement, get the agreement in writing. Be sure to keep accurate records of all communications you have with the lenders or collections agent. Don't accept the first offer that they make, unless it truly is one you can't refuse. As a final bargaining chip, you may want to mention you are considering filling for bankruptcy if you can't come to an agreement. The creditor will have incentive to get some money now instead of taking the risk to get even less in the bankruptcy proceedings. |
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