Negotiating with a creditor can be nervewracking as you sit down across the table or get on the phone facing a professional dealmaker. It’s good to know some dos and don’ts to fall back on when you sit down and shake the creditor representative’s hand to avoid the telltale sweaty palms. Here’s some psychological negotiating tactics to help you out:
Do sound controlled and calm- we know it isn’t exactly easy, but keeping a calm exterior makes the creditor think you know what you’re doing- he or she would be less inclined to pull a fast one on you.
Don’t give the creditor your personal information beyond what’s absolutely necessary, the less they know, the better.
Do tape the conversation. Although you have the option of secretly taping the call, it’s better to tell the creditor that you’re taping the conversation. He or she will be aware of that fact and therefore go after you less aggressively- they’re just as scared of a lawsuit as you are!
Don’t be emotional. This goes for both anger and sentimentality. On one hand, launching a profane tirade against the creditor will wipe out what little goodwill you had for debt negotiation. On the other, creditors don’t want to hear you sob stories about your debt- they deal with similar situations on a daily basis. It’s best to stick to the happy medium: emotionally neutral.
Do have a record of everything. Show up to the meeting with all your spending records and your budget. While negotiating, record the time and duration of your calls or meetings, name of the creditor and company, and a general overview of what was discussed.
Don’t tell creditors the real amount you’re able to pay- tell them you can afford less than that. That way you still have a cushion when you start paying the creditors, and unforeseen events will not destroy your repayment plan.
Finally, do know your rights. See our section detailing your rights from debt collection agencies under federal law; most states have similar laws protecting you from the original creditors. Make sure you know what creditors can and cannot do against you.
