Can you negotiate with a debt collector?
There are times when finances get out of control; this is when debt negotiation can help. Negotiating debt is nothing new, what is different is that more people are having debt problems and they don't know what to do about it. Debt also has a huge impact on your financial future; shedding some light on the debt negotiation process will help you decide which avenue to take.
There are certain areas of debt that can be negotiated. You can do this yourself, but because these situations are highly emotional mistakes can be made. Let’s take a look at how the process works.
When you can't pay your bills any longer your lender can negotiate new terms with you. They will do this in lieu of you filing for bankruptcy because they get nothing if you do. There are three areas which you can negotiate, they are: Interest rates, terms (length of payments) and reducing the principal balance. Your lender will be more flexible in lowering interest rates and give you longer to pay back before they will reduce principal. This is where you need to be careful, if not your financial future could be consumed with a lot of long term paybacks.
Your whole objective in debt negotiation is to get as much principal reduced as you can. It is not an issue of credit scores at this point; it's getting rid of debt as quickly as possible.
Hiring a Debt Negotiation Attorney
Hiring a debt negotiation attorney is one option you need to consider. Since this is a highly emotional situation, and your financial future is at risk, hiring an attorney can be money well spent. They will definitely have your lenders attention and attorneys know the fine points of the laws better than you do. Your lenders also know that attorneys can advise you about filing bankruptcy and banks don't want to hear this.
A good debt negotiation attorney can save you 50% or more when it comes to reducing the principal. You will have to prove that you are in financial hardship; your lender won't take your word for that.
Anytime you enter into these types of debt negotiations, your credit score is affected. This is why you need to resolve these situations as quickly as possible. You want to get your financial future back in order and start rebuilding your credit.
With a debt negotiation plan in order you can be back to normal in a few years. Rebuilding credit is not that hard and your financial future will be right back on track again.