How to negotiate your way out of debt

As you grow up and become financially independent, you have to find some way to handle your financial obligations regardless of your situation. Borrowing money becomes more common, especially during hard times. Credit cards, loans, and payment plans are all different ways that people make ends meet and make their checkbooks balance. Although this may help in the short run, or even the long term in many cases, sometimes it’s only kicking the can down the road. Debt and borrowing can snowball into a much more significant issue that will require your undivided attention at one point when the can is just too big to kick it any further.

Debt negotiation can be a valuable tool for people who are struggling with overwhelming financial obligations. It’s a complicated process by which someone can agree with their creditor to pay a lesser amount of money than that which is owed. In many cases, this is a win-win for both sides, as the creditor won’t have to write off the entire loan as a loss and can recoup some of their money, and the borrower won’t have to resort to more borrowing or even bankruptcy to deal with their debt.

Trying for debt negotiation without an attorney is a tricky ordeal. An attorney can function as an unbiased 3rd party who will work in your favor to try and put together the best deal possible for you, while not being at odds with your creditor. With fewer emotions involved due to their financial detachment, they can keep a level head in the negotiating process to come up with a deal that your creditor will accept, and will work in your favor. Debt negotiations can be done for a variety of loans, including, but not limited to:

  • Credit cards
  • Banking fees
  • Cash advancements
  • Retail credit cards
  • Medical debt
  • Personal loans
  • Debt owed after repossession
  • Legal judgments (over 12 months overdue)
  • Private student loans

Just about any and all liabilities can be renegotiated and changed to allow creditors and borrowers to come out with a slight victory on their end. It’s possible to reduce one’s debt by a very significant percentage, anywhere from 30-70 percent is likely and has been done before. Although it depends on who the creditor is, a reasonable attorney should be able to get a sizeable chunk of your debt removed. However, in many cases debt negotiation may not be the best option, and bankruptcy would be the best avenue instead. If you feel this may be the case for you, the best option is still to speak with an attorney, who can help run through your options and help you pick the one that will most benefit you.