Want to Settle Your Debt? How to Talk to the Creditors?

By arya

There comes this situation in life when you don’t have a concrete plan to pay back your debt and are in no financially healthy state to pay back, and also do not dare to receive phone calls of creditors and collection agents. A bad debt often puts you into such a situation, and then you wonder how you might settle things to get back mental peace as well as waive off the debt too. There really are some straightforward ways to do this if you know what creditors in such cases look forward to.

What do creditors want to do when you cannot payback?

Creditors try to get back the loan they disbursed by all legal means. They try collection through calls, letters, notices and so on. They also send agents to the debtor homes at times to meet and talk. They give in all efforts for collection until they also finally realize in some cases that the debtor is not in the state to pay back. And in those cases, the creditor extends hands for a discussion or settlement. Hence as the debtor, you need not always avoid the creditor calls. When it has been too many days that you are struggling to payback, and you are still getting calls, then instead of avoiding calls, you may try and answer a few to find out if the creditor starts a discussion or gives any clue for settlement or not.

If you get such a trail, then you should instantly grab it, and see that at what convenient terms and the amount the debt can be settled and can get off your head. Creditors lose the hope of full recovery after a certain amount of trying and passage of time. They then try to get back a much amount as possible without counting the profits from that lent money. And such opportunities are not to be missed if you really want to settle the loan and get out of it. You may want to know how to get into a debt settlement negotiation. There are some nice ways to get into a debt settlement negotiation with a creditor.

Repeat some influential sentences that are true

Truth helps! If you have a few loans, and you are planning to tell a different story to every creditor to get attention or sympathy, then this won’t work. You must stick to one simple explanation. Try to summon up the whole story into a small sentence that really explains it in a few well-chosen words. Creditors really would not care why you are ina hardship. They would only care about how you are planning to get out of the hardship so that you can pay back them the loan amount soon. Hence your explanation for not paying back at present must tell about the situation and the action plan both. You may try the styles below:

  • My wife was very sick, lost her job too, and all the money was spent on her treatment. Now she is recovering, and as soon as she joins a job, we will get back to stability to pay back.
  • I was too sick to work for the last two months and lost my job and income. I am recovering. Once I get a job, I will be able to pay too.
  • The interest rates for the loan are too high than usual, and I can’t pay for being bankrupt. I am preparing to file bankruptcy.

You must repeat your story in such one sentence a few times during the conversation to catch their attention.

Do not lose your composure

You must understand that the conversation may get heated and they would not shower you with the best compliments. The situation is such that you will have to hear words that you don’t like because they are not getting their money back and are at a loss, while you are helpless too. Hence if you lose your temper, you won’t be able to negotiate. Therefore do not get emotionally carried away, and stick to the purpose and business. You just have to persuade them to understand your situation, and this needs prior mental preparation on your part to keep your calm. If you feel you are getting angry or frustrated by any comment or style or tone of talking, you better ask them to call later, take some time to cool down, and then with better mental setting talk later. Ask them to get the call recorded. This will ensure that they also stick to s much formal tone as possible and consciously behave better.

Ask for specifics

You will be said both legal and inappropriate words and warnings. They may say you that your property would be seized, you would be sued, etc. You should stay calm and ask coolly that how and when will be the proceedings, how you will be notified, what time exactly you have in hand before the proceedings etc. This will clarify if the person is saying legal and proper things or just trying to pressurize you.

Note everything through the process

Note the call timings, the person’s name you spoke to, the emails you are receiving, and do not delete or lose any detail. Later these details would help you get legal help in debt management and settlement if things do not get solved smoothly. Also, you will be able to track by the records later if the creditor broke any rules during the collection attempts. It’s good to go through debt settlement reviews to get more such ideas so that you do not go through an emotional breakdown in such situations by utilizing total mindfulness and logic.

Concluding notes

Negotiations for debt settlement takes time and patience. It needs you to be cool and composed, patient and planned. Then only you can make your ways through the alleys of negotiations, threats, mental pressure, and deadlines, in the various rounds of talks, to finally settle somewhere. Debts can be settled and you may have to pay a really small amount can be actually owed of you get guided the right way through the process. Try to get an advisor if possible for pain and agony free settlement process.