The biggest mistake people make when attempting to negotiate with creditors is failure to prepare. It is crucial that you have an idea of what you want to get out of the negotiation before you even contact your creditor. Take a look at your monthly budget and income to determine the amount you can realistically afford to repay. You need to know the state of your financial affairs and how they can best be met by a deal with your creditor. Ask whether you need a temporary suspension of payments or just a lower monthly payments. Evaluate whether a lower interest rate would be enough to reduce your monthly payment or do you need a modified payment schedule.
Once you have an idea of what you can afford to pay and how you may be able to achieve that plan, contact your creditor. Debt negotiations are always better before you miss a payment, as creditors are often more willing to make changes if they feel you were proactive. However, if you have already missed a payment don’t worry. You may still be able to secure a deal through persistence and flexibility. It is important that you remember debt negotiations are simply that, a negotiation. This means that you have to be willing to be flexible in what you want and how you want it. Creditors do not owe it to you to negotiate and they are essentially doing you a favor. Come into the negotiation with an open mind and patience. Always be polite and work with the lender until you come to an agreement you can live with.
If you were able to successfully negotiate a deal, congratulations. However, now is the most crucial time for you. It is extremely important that you stick to your negotiated plan and not miss a payment. Missing a payment now could mean the end of your deal and even delinquency fees. If you think you might miss a payment, contact your creditor before this happens. You may be able to make further changes to your deal or request a onetime extension. Remember to monitor your credit report for changes and stay on top of creditors to report the most accurate information at all times. Having an updated credit report will significantly improve your credit standing while you work to get out of debt and rebuild your financial future.