Ideas to Negotiate with Creditors to Pay Off Your Debt

By Staff Reporter - 6 November 2019

Expert Voices

Do you find it difficult to pay your debt in full? You have to negotiate with your creditor or debt collector. In numerous cases, you may reach an agreement to pay off your debt. For debt negotiation, feel free to consult a legal practitioner. It will help you to get a written confirmation of possible settlements. Here are some best possible options to negotiate with your creditors to pay off your debt.

Get the Advantage of IVA

An IVA (Individual Voluntary Arrangement) is an official agreement to make affordable payments to debts. You may get a period of 5 – 6 years to repay your debt. At the end of IVA, remaining unsecured debt will be written off. You will get a chance to make a lump-sum IVA as per your capacity.

With the help of IVA, you can divide your loan into affordable monthly payments. This amount will be based on your surplus or disposable income. In this way, you will have sufficient money to cover your living expenses. If you want to find out more about an IVA, make sure to work with an insolvency practitioner.

Stick to Your Story

If you want to pay off your debt in installments, approach your creditors and share your real story. Avoid fabricating lies and fake stories because it can increase legal complications for you. Make sure to involve a lawyer in this conversation and stay calm. There is no need to do unnecessary drama to get sympathy.

Take notes of this conversation and prepare an agreement to get signs of all parties. Prepare your income statement to figure out your affordability. It will help you to come up with a realistic amount for monthly payment.

If you can pay a lump sum amount after six to eight months, clearly inform this to your creditors and stick to your promise. After agreeing on a repayment plan, you have to get everything in writing. Get signature from all parties to avoid legal troubles.


Create a Monthly Calendar

If your creditors agree on monthly payments, make sure to send each installment before date. Prepare a bill payment calendar to avoid missing even a single payment. On your calendar, you can write a date for the payment of each bill and installment. Make sure to update your calendar each month.

Pay Bills Each Month

Late payments can affect your credit score. Remember, missing two or more payments in a row can increase your interest rates. Things can be challenging for you after missing even a single payment. Make sure to use a calendaring system on smartphone or computer, enter payment details and set a reminder. Pay your utility bills as soon as possible to improve your credit score.

Prepare a strict budget for your monthly expenses to save more money. Cut down unnecessary costs, such as TV subscriptions, eating out, luxuries, etc. It will help you to save money to pay off your debt. After paying off your debt, you will be able to live a stress-free life.     

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