Businesses (and individuals) most often negotiate to get a good deal on products or services. Those same negotiation skills can also be used if you or your business has debt. There are many companies out there that offer debt negotiation services, but if you have solid negotiation skills you can probably handle the process yourself.
As with any negotiation, you must prepare beforehand. In a debt negotiation, you should have all the financial information you need before proceeding—how much you owe, income, how much you could pay, your history with the debtor, and so forth. You should also know what type of debt you have: secured or unsecured, as this may affect the debtor’s leverage.
Any successful negotiation is a both-win scenario. In a debt negotiation, the win for the debtor is the chance to get repaid. For you, the win could be to pay the debt in easier installments, or protecting your creditworthiness.
Another negotiation tactic we have discussed here on Negotiation Space is patience. Take your time when dealing with debtors/collections agencies. If you are too quick to settle, you may not get the best deal.
We have also discussed dealing with difficult people or behaviors. Credit collection agencies are not known for polite behavior. As the article “Negotiate your debt like a professional” by Kris Nickerson says:
“Before going any further it is important to mention that this path is not easy, creditors are often not nice to deal with at the best of times. When you are the object of their attention, you can be inundated with rude and threatening phone calls, nasty letters and many other tasteless tactics used by some companies to get money out of you.
If you can learn to be un-swayed by these tactics and remain calm and level headed through out the whole process, you are well on your way to sorting out your debts and paying much less at the same time. The reason that creditors resort to these sorts of tactics is that it is about all they can do to get the debts paid to them.”
Read article here.
Have you been in a position to negotiate debt for your business? If so, what strategies and tactics worked best?