Other than the paramount variable of whether the
debt is secured or unsecured, your approach to any creditor should be consistent
with all creditors. This does not mean that each creditor will achieve the same
deal; rather, it means that you will approach each creditor similarly.
Deal with a Decision Maker
Your first priority is to ensure that the lender
representative with whom you are communicating has the authority to make a
Normally, your first contact will be with a
collection person who has no decision-making authority. Their job description is
short and simple: to get money from you. Before wasting any time and effort in
this initial exchange, ask them this question: Do you have authority to modify
the terms of the debt? Emphasize that you are suggesting not a solitary late
payment but a permanent modification. You will invariably hear, after some
initial attempt at misdirection, a negative response.
At this point, simply ask to be directed to someone
who has decision-making authority. Remember to remain considerate and congenial
throughout your exchanges. The nice ones will appreciate that you realize its
just their job (the jerks will be aggravated that they cannot push your
Keep Your Financial Details to Yourself
Second, when you get through to the decision-maker,
never, ever, give them any specific financial information or
documentation. You can explain very generally that circumstances e.g., job
loss, family issues, health issues, pay reduction have compelled you to seek
modified terms,. Be no more detailed than that; they will only try to use
detailed information to argue against modification or to gain leverage in their
You do not have to convince them that you need
adjustment; that is your decision.
Name Your Terms
Your third priority is to clearly communicate
specific modification terms that you require. While this can be a low-ball
proposal en route to a higher negotiated resolution, my preference is to
dispense with this archaic negotiation style; it wastes time, increases friction
and relegates you to justifying your position.
Clearly state your terms and quickly obtain an
address postal or e-mail to which you can send your required terms in
writing. Memorialize proposals, conversations and agreements in writing. If
it is not in writing, it never happened.
Remember that You Are in Control
Finally, always bear in mind that you
not the creditor control the negotiations. This is not just an empowering
perspective; it accurately reflects the true negotiating positions.
The creditor needs you (or, more accurately, your
money); you do not need the creditor. The last thing your creditor wants is
another non-performing loan or debt, and this is particularly true in this time
of rampant defaults and red ink.
Hold to your position
As long as you have
previously and properly protected your assets, you will be prepared to cope if
the creditor rejects your efforts and recklessly pursues collection against you.
You will be prepared for that eventuality, and you will know that you tried your
best to work a viable alternative. ●