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1) No more communication with them( CREDITORS), by either phone or mail. When you see your DEBT collections dept on your caller ID, do not answer the phone, and do not return any voicemail messages. 

2) The debt owner is required, under the provisions of the FDCPA, to send a letter to the debtor advising them, among other things, of their right to have the debt validated. Means nothing, so forget about it.

3) When, eventually, you engage in settlement discussions , you will most likely be asked some prying questions, and be asked to disclose financials. Politely refuse to discuss these. DO NOT disclose any personal info, to include your plans, and absolutely no financial or employment info. One member posted that his attorney quipped that giving financial info to a creditor is akin to “pre-judgment discovery.” A creditor doesn’t need that stuff in order to make you an offer. As the oft repeated maxim states, “knowledge is power.” And, as in the following humorous age old buyer-seller exchange. Buyer (Borrower): “How much do you want?” Seller (Lender): “How much you got?”

4) Some key negotiation guidelines:

a) Set your settlement goal, including the price and all the other conditions. Needless to say, do not share your goal with the lender. FYI, settlements are commonly achieved at prices in the range of 5-10 percent . The lowest I’ve seen is 2 percent; that settlement having been achieved via shrewd, hard-nosed bargaining by the borrower.

B) Do not rush the settlement proceedings, to include commencing negotiation talks. Let the debt settlement department initiate the talks, which can range from a minimum of 6 months (very rare) to as long as several years. Be patient. Time is on your side and the passage of time will only strengthen you position.

c) Do not behave as if you are rushed, eager, or worried at all. Instead behave in a very nonchalant manner, with a couldn’t care less attitude. Be prepared to walk away from the settlement talks at any time. Don’t worry, the debt’s not going away, and negotiations can be resumed later. Wait for the lender to initiate re-engagement in the negotiations.

d) When the lender’s settlement department contacts you, most likely after many months, they will leave a voicemail implying there may be a “workout” available for you. Return that call and listen to their offer. This means that lender is now motivated to reach a reasonable settlement, and may be glad to eke out any money on this loan.

e) Never accept the first offer. Instead counter the offer with a counter below your goal price. And, then off you go with your negotiations. Remember this negotiation basic. When the lender asks you to give up something, ask them what they’re willing to offer in return.

f) Avoid talking much, only enough to present you offers (counter offers), and to confirm and verify the lender’s offer. No idle chit chat, and never disclose personal info. Your negotiating opponent will likely be a trained negotiator.

g) While I realize this seems obvious and goes without saying, DO NOT end up negotiating with yourself. This frequently occurs when a negotiator is overly loquacious and attempts to be pleasant and polite to their negotiating opponent. The result is often giving something away, leaving something on the table.

h) It’s prudent to sleep on an offer before accepting or countering it, even for one that initially looks perfectly acceptable to you.

Notice about your credit: Yes, your credit will be damaged in the process, and unless your debtor agrees to credit bargain as part of the settlement, the derog can remain on the credit file for up to 7.5 years in accordance with the provisions of the FCRA.

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If you know the FDCPA, FCRA and TCPA laws and understand how to use arbitration, then I wouldn't follow any of this advice.  Especially #1 and #2.


Also, #4a - the lowest settlement this guy has seen is 2%?  That tells me all I need to know, because I routinely see people on this site and others settling their debts for 0%.  Or how about those debts I, myself, settled for -100%?  Yes, that's NEGATIVE 100%.  That means the lender PAID ME the equivelant of what was owed and then wiped out the debt for good.


Maybe the author of this article should come here and learn a few things.

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