Choose Words Wisely During Debt Consolidation Negotiations With Creditors

By Dawn Handschuh, Personal Finance Writer Archive

For those feeling overwhelmed by their bills, debt consolidation or debt reduction may be desperately needed. But debt consolidation services don't come cheap, so some people forgo a debt consolidation loan and try to negotiate directly with creditors themselves.

It's natural to feel embarrassed or nervous when you call creditors, but you're certainly not alone, especially when seeking relief from high-interest credit card debt. You can use these telephone script excerpts to help you speak more confidently about your situation, or you can tailor them to your unique circumstances.

Be pleasant but direct in explaining why you're calling.

"Hello, Julie. I've had some financial problems recently, and I've fallen behind on my payments."

Tip: Customer service reps usually identity themselves when answering a call. Address them by name in greeting and throughout the conversation.

"I'd like to bring my account current. Julie, can we work out a reasonable payment plan? I've paid my bills on time for X months/years, and I'd hate to see this go to collections."

The rep will ask for your account number. Wait to see what suggestions or offers the rep makes. If she suggests an amount you can't afford, make a counter-offer based on what you know you can pay. Have your budget in front of you so you don't have to guess.

"I've crunched the numbers, and based on my income and monthly expenses, I can afford to pay you $X monthly. I'd like to transfer my other card balances to this account for better debt management. I hope you'll consider lowering my interest rate to make that possible."

Don't overlook the importance of trying to gain concessions that will protect your future borrowing ability.

"How will this arrangement affect my credit report? Once I've repaid this debt, can you remove any negative information from my credit report?"

Be sure to record what the customer service rep says, along with the rep's name and number, and the date and time of your conversation.

"I really appreciate your understanding, Julie. I value our business relationship. I'll confirm in writing what we've agreed to today."