5 Things to Do If Your Creditor Won’t Negotiate
If you’re struggling with the burden of outstanding debt, you’re not alone. In 2015, studies found that the average American household carries about $130,922 in total debt. Over time, the responsibility for collecting outstanding debts may pass to a collection agency. Even under the Fair Debt Collection Practices Act (FDCPA), you might find that these individuals can hound you – sending letters and calling between the hours of 8am and 9pm.
In some circumstances, you might be able to reduce the worries you’re managing by making a settlement offer to the collection agency. However, if your creditor refuses to negotiate, you might find yourself in a difficult position.
Negotiating with Debt Collectors
What happens when you find out that you’re being pursued by debt collectors or collection agencies after an overdue debt? While it can sometimes be easy to just give in and pay the bill, this is not always the ideal or affordable option. Negotiating with debt collectors and collection agencies can be a viable option for reducing the principal debt owed or the interest rate being applied to that debt.
Here’s a short list of tips that can help you when trying to negotiate with debt collectors:
- Do some research and identify all of your assets
- Find out who the debt collector represents and what they’re trying to collect
- Look into the collection agency’s policy on settling debts
- Ask the debt collector questions on what exactly they want and let them know you’re looking to settle
What If a Debt Collector Won’t Negotiate?
Following, we’ll cover five things that you can do if negotiating with debt collectors simply isn’t working.
1. Accept It
Unfortunately for individuals dealing with debt, a creditor is under no obligation to negotiate a settlement, according to the Federal Trade Commission. The same rules apply to collection agencies. If your collection agency or creditor chooses to negotiate with you, they will be doing so at their own discretion, which also means that they’re within their rights to refuse your settlement offer and demand repayment of the debt in full.
In fact, many states allow for collection agencies to add fees and interest onto the original debt balance, and you’ll be responsible for paying this additional amount if the collection agency refuses to work out a settlement deal.
2. Revise Your Offer
Despite the doom and gloom of the previous paragraph, it’s worth noting that most collection agencies will actually accept an offer for a debt settlement if they think the offer is reasonable. If your agency refuses your first offer, then you might simply need to revise the offer and suggest a more appealing number.
If, for instance, your first offer was for 50% of the complete debt amount, consider making a new offer at 60%. Although you’ll have more to pay than with your initial offer, it’s worth remembering that 60% is still less than 100%. That’s $40,000 saved on a $100,000 total balance.
3. Speak to the Original Creditor
If you’re constantly hitting a wall when negotiating with debt collectors, consider speaking to the original creditor. Keep in mind that this will only be possible if the debt belongs to the original creditor, and they have hired an agency to collect the debt from you on their behalf.
Inform the original creditor that you want to find a way to settle the debt, and ask if they’re willing to negotiate. The creditor may choose to accept your initial offer, negotiate a new amount, or refuse outright and refer you back to the collection agency.
4. Remember the Facts
Unfortunately, when dealing with creditors it’s important to remember that they’re not interested in your life, or what happened to get you into the position you’re at today. The job of creditors and collectors alike is to take back the money that you owe using procedures within the boundaries of the law.
It’s your job to protect your own interests, while living up to your financial obligations. In other words, attempting to appeal to creditors with sad stories about what happened to you won’t help. Instead, focus on speaking to them in a language they’ll understand: dollars.
5. Get Some Help
While it’s safe to say that you know the most about your debt and financial situation, there are debt experts out there who can help you to negotiate the terms of a settlement in a way that speaks to your creditors on a different level. A successful debt settlement agency has years of experience & knowledge in how to negotiate with debt collectors. They can help you reconsider your options from a new angle, and may even offer solutions to your debt problems that you hadn’t considered.
What’s more, working with a debt settlement or relief company will also ensure that, if you reach an agreement with your creditors, negotiations are handled properly, with written agreements to ensure the payment terms have been laid out in full.
Free Debt Consultations at New Era Debt Solutions
You don’t have to stand alone when negotiating your debt. Seasoned debt experts are ready to help you figure out the best solution for your financial future.
If you’re struggling to negotiate with creditors or establish a debt payment plan that you can afford, contact our office for a free consultation.