If you would like to have your interest rate, minimum payment, or other terms and conditions changed in your current agreement with one of your creditors, the following information is designed to help you. 


It is important that you note from the beginning that you may not achieve the reductions which you seek without consistent follow up with your creditor.  You may have to write to your creditor multiple times.


For best results, all requests must be in writing sent certified via U.S. Mail, signature required.  The signed, return receipt you receive is your proof that your request has been received by your creditor.


All requests should clearly state your account number, your name and address as listed on the account, the desired objectives and should include documentation of loss of income and inability to continue payments.  Suggested documentation includes (but is not limited to):


  • FEMA Assistance Acceptance Notice
  • Lay-off/Termination Notice
  • Unemployment benefit statement
  • Disability benefit statement
  • Food Stamp statement
  • Current bank statements
  • SSA/SSDI benefit statement
  • Hospital/medical bill
  • List of all household residents, age, income, source of income, and relationship to you
  • Tax return
  • W-2
  • 1099



If you purchased credit card payment insurance or other debt repayment insurance, documentation as specified in your policy will be required before the insurance will kick in.  Make sure you understand all of the terms and conditions that would invalidate the coverage, such as continued us of a credit card.  READ THE FINE PRINT!!!!


When negotiating with governmental agencies, such as the IRS, interest and/or penalties continue to accrue even if payments are deferred.


Court ordered payments, i.e. judgments and garnishments usually require adjustment to the court order by the courts.  You should consult your attorney.  Note that judgments and garnishments usually cannot be taken from SSA/SSDI benefits.


Negotiating for changes in your consumer debt usually yields poor results and usually hurts your credit rating.  Any time you consider negotiating with a creditor regarding consumer debt, you should do the following:

    • Stop using credit card
    • Stop using payday loans
    • Stop using title loans


If your debt is secured, you should be prepared to lose the collateral, i.e. ATV, refrigerator, HD/Plasma television, etc.


Many creditors will not negotiate with you as long as you are current with your payments.  If you are not current with your payments, many creditors will not negotiate with you until you are 6 or more months behind in your payments.


Doctors, hospitals, dentists, medical laboratories, and other medical facilities are especially quick to sell past due accounts to a collection agency once they reach 60 days past due.  Make sure you keep copies of all payments made by your insurance company and all payments you have made.  Contact your medical provider’s financial aid or accounts receivable department immediately if you need to set up payments over time.


Always obtain a written, signed agreement from your creditor for the negotiated settlement. 


Never allow a creditor to automatically draft a payment from your bank account.


If you are considering a debt management plan note:


  • Debt Management Plans (DMP) are dangerous
    • Many are under Federal investigation
    • Most charge high up-front fees
    • Most charge monthly fees
  • ALL Debt Management Plans (DMP) have a negative impact on credit scores



Negotiating with Creditors - Failed Attempts


Are your attempts to negotiate with your credit card issuer going nowhere fast?  Are your phone calls being forwarded to third parties who have no affiliation with your creditor?


If you are one of the hundreds of individuals who are trying to negotiate in good faith with one of your credit card issuers, but the creditor refuses to discuss your case with you, you now have a new advocate.  The Consumer Financial Protection Bureau (CFPB) has a web site, www.consumerfinance.gov and a hotline (not yet published) through which you may file complaints about your credit card issuer.


You should be prepared to provide the following information:

  • Credit Card Issuer’s Name
  • Your account number
  • Your name
  • Specific, detailed complaint (i.e. specific dates and times in which you attempted to contact your creditor and the specific actions taken by your creditor such as transferring you to a non-affiliated third party)
  • Your desired outcome


Note:  CFPB will forward all complaints to the credit card issuer allowing them one more opportunity to resolve the problem.  If the credit card issuer does not resolve the problem to the consumer’s satisfaction, CFPB will work with the consumer to resolve the issue.