How to Get Out of Debt - Negotiating Payments
Being buried in debt is a frustrating and stressful experience and many individuals feel tempted to simply give up rather than fight their way to financial freedom. Many individuals also make the mistake of believing that the only option available to them is a drastic choice like declaring bankruptcy. While bankruptcy can be the right choice for some individuals in certain situations, most people are able to take care of their debt without going to such a dramatic extreme simply by staying in contact with their creditors and working out a payment arrangement that is beneficial for both.
Although the idea of getting a hold of a creditor and discussing the issue may seem like the last thing an individual wants to do, especially if they are already being harassed by bill collectors or receiving late notices in the mailbox. The truth is that debtors, whether credit cards, lien holders, or a mortgage company, all want the same thing as the individual who owes the money. They simply want the debt taken care of. It is easy to assume that all creditors are villains, but most are eager to work out a suitable payment arrangement.
Contacting creditors and setting up a payment plan is not only a great way to get an individual's debt under control, it can also protect their credit rating in the process. This is also a better choice than a debt consolidation loan since the person that owes the money does not have to borrow additional funds in order to pay off existing creditors. It is important to keep in mind, however, that negotiating a payment arrangement is just that, a negotiation. The creditors will likely try to convince an individual to pay more than they can afford and it is up to the debtor to counter with a more reasonable offer.
Although creditors are the more aggressive party in the creditor debtor relationship, a person who owes money needs to understand that it is their obligation to pay that money back and that they have every right to negotiate for the best terms available. Rather than hiding or avoiding those unwanted phone calls, a person can usually negotiate a favorable arrangement simply by being persistent and taking control of their financial situation. Reduced payments and a freeze on the interest rates being charged are not uncommon when it comes to negotiating a new payment arrangement with a creditor.