If you’re juggling multiple credit card payments and other debts, it might be time to start thinking about negotiating—with your creditors—that is. It won’t be easy, but believe it or not, negotiating is a proven way to get a better deal and help dig yourself out of debt faster.
Before you make the call, be prepared. The credit card company deals with frustrated customers all day long. They’re not going to give you a break easily. But if you know what to say and what to ask for, you’ll be more likely to come to terms you both can agree to.
First, figure out your budget. How much can you realistically afford to pay each month? You should figure out how to pay as much as possible toward your debt while still covering all of your normal expenses like rent and groceries.
Once you have this monthly payment in mind, figure out how much debt forgiveness you’re going to ask for. It will be nearly impossible to get out of any more than half, and it’ll likely be less than that, so a good rule of thumb is to start with asking for 50% of your debt to be forgiven. Then you can work down from there depending on the creditor’s response.
When you call, tell the creditor that you’re unable to make your monthly payments, but that you can and will pay a lower amount. They’ll likely try to get you to come down from your requested 50% forgiveness, which you can do if you’re able to afford the lower monthly payments. The goal here is to find a middle ground to both can live with.
If and when you find this middle ground, ask the creditor to send it to you in writing so there’s no question about it later on. If at any point you feel like you’re hitting a brick wall, mention that you’re consider filing for bankruptcy. This shows the creditor that you’re in seriously bad shape. They’re going to want to recover a portion of their money rather than nothing at all, and may be more willing to work with you.