How Can Debt Negotiators Help You Get Out of Debt
8 MIN READ
Published January 19, 2024 | Updated January 30, 2024
If you have fallen behind on debt repayments, are dealing with collections, or have faced a financial setback that makes it difficult to repay your debts, it may be time to consider debt relief.
You can work with a debt negotiator to help you create a plan based on your financial situation and budget. An experienced negotiator also knows how to convince lenders to accept a settlement offer so you can pay off your debts faster.
What Are Debt Negotiators?
A debt negotiator is a professional who can help you create a debt settlement deal. These negotiators typically work with debt settlement companies and can help negotiate with your lenders so you can settle your debts for less than you owe.
Good debt negotiators have knowledge of different kinds of debts and have experience with lenders of all types. They communicate with lenders (using their terminology) on your behalf and help you create a plan that will help you become debt-free as soon as possible.
Debt Negotiation Services
Debt negotiators help you analyze your budget and the structure of your debts so you can decide which loans and bills to prioritize. They help you create a budget based on your income, debts, and your normal living expenses so you can start saving money for future settlements.
A debt negotiator will explain what you can expect during the process and how much you may be able to save through a settlement. They’ll handle all the communications and negotiations so you can get the best possible savings. They’ll also take care of all the paperwork, be there as your advocate, and work with you throughout the process until your debt is fully settled.
Why Hire a Debt Negotiator?
If you’re finding it challenging to keep up with high-interest credit card debts, late payments, and mounting balances, it may be time to talk to a debt negotiator. While it is possible to negotiate debts on your own, there are a number of benefits to hiring a debt negotiator:
- You’ll be able to pay off your debts more quickly and start recovering your financial footing.
- Skilled negotiators may be able to help you save as much as 50% of the amount you owe.
- Once your debt is settled, your stress level will probably be greatly reduced.
- You’ll be able to start putting aside money for your future once you’re no longer making monthly debt payments.
- You’ll get relief from debt collector calls once your debt is settled.
6 Tips For Working With Debt Negotiators
If you’ve decided to work with a debt negotiator, we have six tips and strategies that can help you get the best possible results.
1. Understand Your Debt Situation
Before you start working with debt negotiators, it's important to have a clear idea of how much you owe and to whom. Negotiation strategies may differ for each kind of debt, such as medical bills, personal loans, credit card debt, and more.
Make a list of all your debts and include details like the name of the lender, the current status of your account, monthly payments, interest rate, and remaining term. Having all this information on hand will help save time and make it easier for the debt negotiator to recommend the right debt relief option for you.
2. Gather Documentation
You’ll also need to submit documents related to your debts to the debt negotiator to enroll your debts in the program. Ideally, gather all the documents you may need before the initial meeting. Some of the documents you may need are:
- Account statements for all your debts
- Payment history
- Income details, such as the source(s) and amount(s)
- Details of other expenses and obligations
- Any collection notices or letters you may have received
3. Find a Reputable Debt Negotiator
The most important part of the process is finding a reputable and reliable debt relief company to work with. Ask friends or family members for referrals if they’ve used the services of a debt negotiator in the past.
When researching debt negotiators, it’s important to check their accreditation, licensing, and customer reviews to ensure they have a good track record. Visit their website to learn more about their services, fees, and process.
4. Develop a Negotiation Strategy
You’ll work with your debt negotiator to create a negotiation strategy based on your goals, budget, and your financial situation. Before you present a settlement proposal to a lender, you’ll have to think about how much you can realistically afford to save each month.
Review your income, expenses, and other debt obligations. Make sure you leave room in your budget to accommodate unexpected expenses. You’ll also have to develop a negotiation strategy based on the total amount you’re willing to pay to settle the debt. Your debt negotiator can recommend a negotiation strategy that may work for you based on this information.
5. Understand Consumer Protection Laws
As a consumer, it's important to understand the laws that govern debt negotiations and collection activities. The Fair Debt Collection Practices Act (FDCPA) is a federal law that dictates what a lender or collection agency can and cannot do to recover the amount they owe.
The Consumer Credit Protection Act (CCPA) is a federal legislation that is designed to protect you from lenders against misleading advertising practices and mandates disclosure requirements. There may also be state-specific laws and regulations, such as licensing requirements for debt negotiations, that you should learn about before you work with a company.
6. Communicate Effectively
To increase your chances of success, you’ll need to communicate effectively with debt negotiators and with your lenders if needed. Explain your financial situation clearly and firmly while being polite and open to hearing their input and recommendations. They’re just there to help you.
Explain your goals and budget clearly to your debt negotiator so they’ll be more prepared. Be open and honest, and don’t hesitate to speak up if you have questions or are not satisfied with any part of the process. If you agree to a settlement plan, ensure you get it in writing from the debt collector.
Success Stories and Case Studies
When used correctly, debt settlement can help you get out of debt sooner and save a considerable amount of money in the process. Here are two success stories from TurboDebt that highlight how negotiating with your lenders can help.
Tricia, a Registered Nurse, had over $50,000 in total debt and was finding it difficult to keep up with repayment. After enrolling in a settlement program, she was able to save 53% on her debt with a monthly payment that she found much more manageable.
Another success story from TurboDebt is that of Gaye, a university professor with a total debt of $39,856 from credit cards and personal loans. With the help of a debt negotiator, she was able to settle her debt for 45% of her debt in just nine months so she could get a fresh start.
Find the Best Debt Negotiator Near You
Working with a debt negotiator can help you reach an agreement with your lender and get back on track with your finances. Working with a professional may improve your chances of success and maximize your savings.
“When looking for a debt negotiator near you, be sure to check customer reviews and familiarize yourself with the program, process, and fees you can expect to pay,” says Brad Reichert, a financial expert and the founder and managing director of Reichert Asset Management LLC.
“Federal law prevents debt negotiators or debt settlement companies from charging their fees upfront before providing any kind of benefit to the customer,” Reichert explains. “Only scam artists posing as debt negotiators will require you to pay their fees upfront,” he adds.
If the company offers a free consultation, take advantage of it to ask any questions you may have, such as if they have a debt limit. Most importantly, once you enroll in a program, stick with it to the end for successful debt resolution.