The burden of debt isn’t really one of the best feelings, but the thing is, no matter how bad it feels, you will eventually have to pay it off. There is no escape from it.
So rather than thinking, worrying, and stressing about how you will escape your credit, it is wise if you rather plan on how you will manage to pay it.
Sometimes, when you look at the whole figure that you need to pay, things can get stressful. But this is where most people go wrong. You don’t have to look at the big figure at once, because you do not have to pay it all at once. Rather than looking at the entire mountain in front of you, look at the stone at your step and try to remove it. Eventually, you will be able to get rid of the entire mountain.
So, the first step while climbing this mountain of debt is negotiation with creditors. No matter how daunting the task may sound, it is the need of the hour.
And you never know, you might be able to settle for a lot less than what you actually owe.
So below, I’ve compiled a list of tips on how you can negotiate with your creditors, which will make the entire task of repaying debts a lot easier.
1. Do not lose your temper
This is not just a pro tip to deal and negotiate with your creditors, but it is a pro tip for life. Losing your temper will not get you anywhere. If you are right, there is no need to get angry, and if you are wrong, you have no right to get angry.
No matter what the other person says, you need to stay calm and explain yourself. If the creditor is angry, and you also lose your temper alongside, it will eventually make things worse for you. So, instead, stay calm and avoid the drama.
2. Tell them the truth
Or, if you cannot tell the truth, you need to lie constantly – which is impossible. Your creditors may not be interested in your explanation, but they will definitely hear you out if you narrate your hardships with full honesty.
If you’re here reading this, there’s a high chance you have multiple creditors, so make sure you communicate them all the same story without any manipulation, if not, it is bound to backfire.
3. Know your rights
It might seem surprising to you, but yes, even as a debtor, you have certain rights. These include that your creditor cannot harass you over the phone, with profane language. They cannot threaten you with actions that are illegal, and harmful for you or your family…. And similar.
So, know your rights well, and ensure that they are functioning well within them. These laws were built to make it easier for you to pay back in the future.
4. Work out some leverage
Again, if you haven’t done your research well, you might not know this, but you still can work out some leverage.
The leverage here includes, for instance, if your creditor has a lower chance of winning a lawsuit against you, he wouldn’t wish to go for it. Or, if in the timeline, this debt now cannot be reported on your credit report, also presents you less incentive to pay up.
Of course, you will have to pay up, but all of this can be tied well together and used as an incentive. This is one of the core principles of how credit mediation debt negotiation works.
Over to you…
According to the new report, the total external debt of the 120 low- and middle-income countries rose by 5.4% in 2019 to $8.1 trillion, equivalent to 26% of their gross national income (GNI).
Clearly, you are not alone, so you do not need to stress about it. Rather than stressing, it would be wise if you formulate an action plan, work on a budget, and start to pay back your debt, even if it is in small instalments.