NEW YORK (MainStreet) — What if I told you that you could save 20% or more on your outstanding debt? Sound too good to be true? It's not. In fact, there’s a whole cottage industry dedicated to helping people bring down the total of their outstanding debts. However, as with any negotiation, there's a right way and a wrong way to go about it. To get the maximum reduction of your outstanding debt, read on for tips on negotiating your debt down from seasoned professionals.
You Don’t Need an Agency
Nearly everyone has turned on the radio or television and heard promises to reduce your debt dramatically -- for a fee. John Heath, directing attorney with LexingtonLaw, points out that such agencies are entirely superfluous.
"They generally charge quite a bit of money, and what they do tends to be things you can do on your own," he says. While they might have more experience than you do at negotiating down debt, they don't have any magic powers. "A lot of people know more about their own finances than an agency," he says.
The collection agency's ability to divine your finances brings up another point.
"One of the biggest mistakes people make is not being up front and truthful," he says. Collection agencies tend to be less eager to make deals with people who can pay but claim they can't.