Is there a secret in the debt settlement industry that creditors don’t want you to know about?
I owned a debt relief service company and worked in the industry for five years. I heard a lot of people tell me they had the “secret sauce,” the “inside information,” or the “best connections.” It was all baloney. They didn’t have anything you couldn’t have, and they didn’t know anything you couldn’t also know AND USE for your own negotiations.
So, if there was one thing I learned in all those years that was kept pretty secret by the creditors, it was that their collections agents work on commission, they have quotas, and at certain times during the year you will be able to get better settlements because they are desperate to make their quotas. You can ride that wave if you time it right, and you can benefit from their need to clear the debts from their books.
Ready to take advantage of this? Here you go.
The last week of the month is the best time to negotiate a settlement.
What does that mean for you? If you have the money set aside and you’re ready to settle, your best time to contact your creditor is about mid-month (just after the 15th) and start talking about being able to get some money within the next couple of weeks to settle the debt.
Think about what you just mentioned: it’s past the middle of the month, and sometime within the next couple of weeks – which might mean at the very end of the month, but MIGHT mean at the beginning of the next month – you’ll probably be able to get some money together for settling the debt and paying the creditor.
You’ve now engaged the collection agent’s attention, because what he hears is: “By the end of the month you can collect a commission if we can settle this debt.” See what I mean? You didn’t say you’d have the money, but you said you might be able to get it, and he’s jumped ahead to start calculating his commission.
Now you can start haggling over the amount. As I mention in my book, try to settle for about 20% of the amount you owe, and anything under 40% is considered a good settlement (for you). You might be able to settle for 10%, I’ve seen it done over and over. Get the best negotiation you can get, of course.
Never make a settlement payment without a written offer from your creditor that states you’ll be settled in full when the payment clears.
This is so important I’ll probably write an entire article just about this point.
If you cannot negotiate with the creditor this month and get the kind of settlement you need, try again next month.
The commissions deadline is every month. If the collection agent you’re working with isn’t really helping you and isn’t trying to get the debt settled, they may not work there next month when you try again; the next collection agent may be more motivated to get the debt settled and that can work in your favor.
For more information about this topic, and sample conversations you can use to get much better settlements with your creditors, buy a copy of my book and find out exactly how to do it.
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