How to Get Out of Debt - Learn to Renegotiate
If you feel that you have exhausted all of your resources and still cannot find your way out of the hole of debt that you are in, you still have options beyond accepting defeat and declaring bankruptcy. If you are unable to borrow money against your home, 401(k) or life insurance policy, cannot borrow money from friends or relatives and do not have a vehicle that you could sell so that you can purchase something less expensive and use the leftover money to apply to debt, you may feel like you have no options left to you.
Rather than giving up, now is the time to get in contact with your creditors and inform them of your situation. Creditors, especially bill collectors, are renowned for their ability to talk tough and bully individuals into accepting payment arrangements that they cannot afford. Fortunately, they are not the only ones who can negotiate from a position of power. Although you may owe them more money than you can currently afford to pay off, it is important for you to keep in mind that they are not holding all of the cards in the situation.
When you boil down everything to the basic facts, the creditors want you to pay them. This means that if you really have no other options available to you other than to declare bankruptcy, you should inform them of this. Creditors know that by declaring bankruptcy, you will essentially wipe your slate clean, owing them nothing. This means that if faced with the choice of accepting a lower payment schedule, a reduced interest rate for both or getting no money at all, they will almost always choose to work with you so that you can pay back your debt to them.
If your creditors understand that you may have no other option than to resort to the drastic step of bankruptcy, they will often go out of their way to negotiate acceptable terms rather than being forced to write off your debt entirely. If you do not feel like you have the ability to negotiate on behalf of yourself, there are a number of organizations available that can assist you. Credit counseling agencies are often able to negotiate favorable terms on behalf of their clients by making creditors understand just how dire the situation is on behalf of the individuals utilizing their services. It is important to remember that you always have options.