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You May Be Able to Renegotiate Some Debt

In these tough economic times, you may be forced to decide which payments to make each month. The mortgage or the medical bills? The credit card or the cell phone?

You may have other alternatives. In the last few years, opportunities have increased for consumers to renegotiate or reduce some debts. With the growing threat of credit defaults, bankruptcies and foreclosures, many creditors are offering flexible payment options for their customers, according to ApprovalGUARD President and CEO Jeff Mandel.

ApprovalGUARD is a credit advisory service that assigns a personal coach to each client to help them understand, evaluate and optimize their credit and debt profiles.

"This ongoing client attrition places an extra strain on servicers to offer more appealing deals and options," Mandel says. "In many cases, a strategically placed phone call or personal visit to the decision-maker can result in reductions of outstanding balances, interest rates or terms, and at times, a complete write-off/waiver of remaining balances."

Mandel offers these tips for negotiating with creditors:

• Stay friendly, calm and factual – even if you don't like their offer.
• Ask to talk to a manager or supervisor if the person you're dealing with seems unwilling or unable to help you.
• Keep detailed records of who you've talked to, when you talked and what was discussed. Include the date and time.
• Get all agreements in writing and obtain a receipt or new statement outlining the new terms.
• Be prepared to explain and document your hardship - job loss, long-term illness, etc. - but avoid providing details if possible.
• Before you call, have an idea of what settlement or terms are acceptable.
• Keep in mind that some credit card providers may lower your available line of credit if they think you represent a higher risk.
• Remember that you don't have to accept any offer they provide. Don't be afraid to make a counter-offer.