The worst thing you can do if you fall behind on card debt is panic or bury your head in the sand. In this article, debt reduction expert David G Lannister shows you how to negotiate a repayment plan that could save you a great deal of time and money
Guest Article by David G Lannister
Whatever you may think, your creditor or debt collector isn’t the enemy!
Approached properly, it’s as much in their interest to reach a suitable debt repayment programme as it is in yours.
The first thing to remember is to keep it simple.
It might seem scary, but we’re not dealing with high-level commercial negotiations – you don’t need to be Bruce Willis or any other ace negotiator.
All you want to do is reach a mutually acceptable compromise by which the creditor gets paid – but on terms which best suit you.
Let’s look at the most common techniques used during debt repayment negotiations…
a) Problem Solving: Where you both work at the problem to reach a solution
b) Total Contention: Persuading or forcing the other party to your point of view alone
c) Yielding: conceding individual point which aren’t vital to you
d) Compromise: Settling for a mutually accept outcome which is not ideal to either
e) Inaction: Doing nothing because it achieves an aim, or because there’s nothing you can do!
In practice, there’s usually little room for real negotiation as the points involved are usually simple.
The outcome will largely be determined by what you disclose as your financial position in your Financial Statement (which I cover earlier my course LINK to promo).
With that said, assuming you’ve prepared yourself as fully as possible, you might want to adopt any of the following:
b) When dealing with offers and counter offers you can ‘be contentious’ and stick doggedly to your offer. In other words, if matters are going backwards and forwards with offers and counter offers, do not either immediately or every time automatically increase your offer.
You should avoid pure ‘horse-trading’ or ‘splitting differences’. It’s far better to ‘start very low’ with any offer.
Always avoid using round figures; use precise figures, e.g. if you have been pushed above a £15 per month offer , then you should next offer, say £15.75 as opposed to £16.
e) Inaction: You should only avoid communication with the creditor where matters are not immediately urgent and you need tie for whatever reason.
Perhaps the most important point when negotiating – is that you should never confuse negotiation with confrontation. Although negotiations will be more difficult to you than the creditors, it’s important that you remain calm and patient throughout.
You should certainly avoid becoming emotional particularly if (contrary to advice) you negotiate over the telephone or, even worse, face-to-face.
Let sum things up.
7 simple but effective card debt negotiation tips
1. Always keep matters simple and keep in mind your ‘end goal’ – to reach a mutually acceptable compromise by which the creditor gets paid – but on terms which best suit you.
2. Don’t do so in a hostile, unconsidered or intemperate manner. You’ll get nowhere fast. They are usually more experienced in debt matters and they can record calls.
3. If you’ve had the agreement for some time and paid regularly, remind the creditor of that fact.
4. Be ready to explain, if you haven’t already done so, the reasons as to how and why the arrears debt has arisen. You should be prepared to refute any allegation or inference that the debt was incurred ‘unreasonably’ or through ‘high living’!
5. Ensure, as a first step that interest and other fees or charges have been suspended – see later.
6. Use simple and basic financial negotiating techniques. Start low and don’t increase offers in ‘round numbers’. It’s better to offer £15.30 a month than £16 or even £15.50.
7. Do not confuse ‘negotiation’ with ‘confrontation’ nor with ‘emotion’.
I hope you found this article useful. You can read more of David G Lannister excellent tips in his manual: Debt Free Solutions. Click on the link to find out more and to get your hands on a risk-free trial copy.