Most borrowers are very fearful of debt collectors.

After all collectors have the reputation of using brute force and harassment just so they can succeed in collecting money from their clients – the different credit companies.:

Still, there is one simple way that you can do to avoid dealing with fearsome debt collectors. That is to negotiate your existing debts with your original creditors. With the right words and with the right settlement offer, you can convince your lenders to reduce your outstanding credit balances.

But how can you do this? Below we have listed two helpful tips that you can use when negotiating your debts with your lenders.

Tips on Debt Negotiation

1. Estimate how much you can pay and offer less.

Know the state of your finances. This will show you how much you can pay for your unsettled debts. Negotiate with your creditor in a courteous manner. Who knows your courtesy and politeness will help you land an excellent deal with your lender.

You may also offer a debt settlement fund that your lender will find hard to resist. You may provide as much as 40% to 50% of your total credit balance to your creditor. This way, you can convince the credit company to accept the amount you are offering and eventually terminate your credit obligation with it.

2. Put everything in writing.

If your creditor agrees with your offer, be sure to put everything in writing. Get a proof of payment and let your lender sign your agreement. This way you can have sufficient documents that will detail the agreement you had with the lending firm. Should it attempt to collect again your unsettled charges, or even sue you in court you have sufficient proof that can disprove the credit firm’s claims.

Now suppose your debt has been assigned to a debt collection agency. What should you do when dealing with a debt collector?

First and foremost you must know that there are some debts that can no longer be collected even by debt collection agencies. This is under the provision of your state’s statute of limitations. According to this policy, debts that have not been paid for seven years cannot be collected anymore. And it also mentions that an unsettled seven-year old credit account should no longer appear in your credit profile. So check the age of your outstanding debts and identify the provisions of your state’s statute of limitations. This way you can check whether or not collectors can still ask you to pay your unsettled credit obligation.

If your debt is still collectible, then you must make it a point to pay your dues every time your debt collector visits your home to collect your unpaid charges. This way you can avoid getting harassed or threatened by your debt collector.

An Important Reminder

You must always remember that debt negotiation can cause you to have bad credit score. So right after taking this credit busting option, you must make it a point to take important steps to improve your bad credit score and eventually attain thorough bad credit repair. How can you achieve these goals?

Well, you can start by taking credit counseling programs. Through these programs you can receive advice on how you can attain bad credit repair. For example, you will be given helpful tips on how you should manage your finances and credit accounts properly. You will be taught how to devise a personal budget that you can use to avoid falling into new debt traps. And most importantly you will receive advice on how you can rebuild your credit reputation. By following the steps that will be discussed in your credit counseling program, you will surely find ways on how you can fully repair your bad credit history and regain credit worthiness.