3. Prepare to Pay a Lump Sum
It’s important to be clear on what you can really afford to pay and most creditors would prefer a lump sum sooner, like in one to three months, than over a long period of time, credit experts say. “It’s not unusual to settle debts for 30 to 50 cents on the dollar, especially if you can come up with that lump sum as soon as possible,” says Detweiler.
4. Keep Good Notes
Make sure you have a notebook handy and take excellent notes, including the time, date and full names of the people you speak with at the credit card company. “If they say anything that may be illegal, make a note of that,” says Detweiler. “That may give you some negotiating leverage.” For example, you might hear that you “can’t file for bankruptcy,” which is totally false, she says.
5. Enter a Debt Management Plan
As a last resort, if your debt is far too great, you’re past 180 days late on your bills and you have no idea where to begin or how to decide which creditors to call first, it may be worth entering a certified debt management plan and working with an approved credit counselor to work on your behalf. There are a lot of debt management scams out there, so make sure you do your due diligence before signing up anywhere. Consider starting with The National Foundation of Credit Counselors, where you can search for reputable credit counseling agencies in your area.
Catch more of Farnoosh’s advice on Real Simple. Real Life. on TLC, Friday nights at 8.