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Debt Reduction Education

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Contacting Creditors

The first time you contact your lender to request a reduced payment, be sure to have a good explanation as to why you need a reduced payment.  It maybe because you lost your job, non payment of child-support, too much credit card debt, illness, etc.  Explain to the lender with confidence that you are working diligently to solve the problem by activities such as living on a strict budget, getting a second job, and/or taking a money management course.

Stress to the lender that you want to continue making payments on your debt but in order to do so you need a new agreement.  Be very specific as to what you want but be prepared to negotiate.  Don’t show all your cards at once.  If you want a $100 reduction in your monthly bill, ask for $150 and work your way down to $100, if possible.

If the first person you speak to isn’t budging to working with you, call back later to speak to a different representative or ask for a supervisor or manager.  A supervisor or manager will have more decision making authority and maybe able to agree with your request.

Some lenders may refuse to negotiate with you directly and ask that you contact a credit counseling agency for them to negotiate on your behalf.

Get it In Writing

If you are successful in negotiating better terms for you repaying your debt, be sure to get it in writing.  If the lender refuses, write the agreement yourself, date and sign it and send a copy by certified mail to them.  The agreement must include deadlines, payment amounts, duration of agreement, interest rates, fees, etc.  Having an agreement in writing is vital should problems arise in the future.  

If your agreement involves a lot of money you may want to have a consumer lawyer review it to make sure it’s in your best interests.  Be sure not to hire a lawyer until you know exactly how much it will cost you.  Most lawyers charge $100 to $500 per hour depending on where and the size of the law firm.  If you cannot afford a lawyer, you may get help fro the Legal Aid Society in your area, which is a law firm for poor people.  You may want to visit a law school that has a legal clinic where a lawyer or law student can review your agreement for free.  Another option is to contact your local or state bar association to find a consumer lawyer who does pro bono work for consumer with financial problems.


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