Negotiating a debt repayment, settlement, or consolidation agreement with a creditor takes equal parts luck and equal parts skill. A person who is attempting to resolve his or her debts with a creditor must be intuitive enough to sense when a particular tactic is not working and be willing to adjust his or her approach in an attempt to obtain a more favorable result.
There are, however, certain things that should never be said during debt negotiations. These “banned phrases” are bad because they put you in a position of weakness during the negotiations or may cause you to give up certain rights. Some of the more egregious “banned phrases” include:
· Let me talk to your supervisor.
Why this is bad: Debtors whose telephonic negotiations are not going well may think that all they need to do to better their situation is to speak to the next higher person on the company's totem pole. This approach, however, doesn't usually yield many positive results. Chances are the person with whom you are speaking will speak with the "supervisor" before the supervisor talks with you. This puts you at a disadvantage. Not only this, but there is no guarantee the next person you speak with will be a supervisor.
What to say instead: “Goodbye.” If you are not making progress in your negotiations by speaking with the agent, end the conversation. Try calling back at a different time and speaking with a different agent or drafting a letter addressed to the manager or supervisor of the creditor’s collection department and make your case in this way.
· I’m going to file for bankruptcy.
Why this is bad: If you are going to file for bankruptcy, then it is okay to let the creditor know this. But do not use bankruptcy as a bluff: a creditor may believe your bluff and accelerate collection efforts against you. Some creditors may be less willing to offer you repayment options if you threaten to file bankruptcy.
What to say instead: Again, if you do intend to file bankruptcy if you cannot reach an agreement, there is nothing wrong with telling the creditor this. But if you have no intention of filing for bankruptcy (or cannot file for bankruptcy), consider informing the creditor that you will simply need to “explore other options” if you are not able to reach an agreement. Contact an experienced debt settlement attorney to find out what you should and should not say to creditors.
· I will offer you $x to settle this debt.
Why this is bad: Negotiation wisdom says that the first person to mention a price in any negotiation – whether for a house, for a car, or to resolve a debt – will ultimately lose the negotiation. Stating your price out front puts you in a position of weakness. For example, suppose that you owe $10,000 to a credit card company and want to settle your debt. You make the first offer and offer to settle the debt for $7,000. The creditor now knows he or she can get at least $7,000 out of you. This means the creditor does not need to be willing to go any lower than that amount. The creditor will then (in all likelihood) begin pressing you to accept higher and higher amounts.
What
to say instead:
Wait for the creditor to make the first offer and then negotiate down from
there. If the creditor asks you to make the first offer, ask the creditor what
he or she feels is an appropriate amount to resolve the case. Find various ways
to insist that the creditor make the opening offer in the negotiations. If all
else fails, claim ignorance: "I don't know what type of offer would be
appropriate to make in this type of situation." We at Ariano & Reppucci can handle the negotiating for you, making sure you don't make any statements that could damage your situation.
