Are you scared to negotiate on your debts?

One thing that I have learned during my time as a debt collector is that someone who knows the process can totally manipulate the situation. When it comes to credit card settlements you are in the “power position” when negotiating mainly because you are the one with the money. The banks do not want you to file bankruptcy no matter what they tell you. Why do you think they pushed so hard for the new 2005 Bankruptcy Abuse Prevention and Consumer Protection Reform Act. You don’t have to be a pro to negotiate for yourself but practice the following tips and you could be on your way to minimizing your debt:



Learn to Flinch

  • The flinch is one of the oldest negotiation tactics but it is one of the least used. A flinch is a visible reaction to an offer or price. The objective of this negotiation tactic is to make the other person feel uncomfortable (i.e debt collector) about the offer they have presented.
  • Here is an example of how it works. A collector offers to settle an account for 80% of the balance. Flinching means you respond by exclaiming, “You want how much?!?!” You need to sell the fact that you want to do this and the very best you can do is 50%. Unless the other person is a well seasoned collector, they will respond in one of two ways; a) they will become very uncomfortable and begin to try to rationalize their price, or b) they will offer an immediate concessions. Either, way you will have the upper hand.

Threaten to File Bankruptcy or Settle Another Account

  • It is better to walk away from a settlement (especially early in the month when the account is new for the collector) rather than make too large a concessions or overpay. You will find that most collection agencies will always work with you it if you offer some kind of lump-sum payment (i.e 10% of the balance).

Quote of the Day

“Never call an accountant a credit to his profession; a good accountant is a debit to his profession.”

Sir Charles Lyell


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