Beginning Tips:

•  Be cordial with representative Ex. If they ask to put you on hold respond with “sure, no worries take your time – this disarms them 
•  Ask the rep how they are
• Make conversation with rep
•  Be confident – don’t be a smarty pants, but do be confident & don’t let the first no stop you
•  If at first you don’t succeed, call back & speak with someone else. Sometimes it’s just a matter of who you spoke to. The first no, is just a delayed Yes =)

The Goal is to get the rep to become an advocate/teammate in what you’re requesting. If you’re rude to them, odds are they will advocate AGAINST you & that’s not what you want. 

Note: I have worked on phones before in college & when you are on the phone with folks all day it’s always a breath of fresh air to speak to someone who is cordial, so these tips 9/10 will help your case greatly. So just be nice. 

P.S. you should ALWAYS be nice to people you deal with not just when you want something. =) Ok, let’s get to it. 

Here’s my Script:

“Hi, my name is _______. How are you? …I’m calling today to inquire about the possibility of paying off my account, could you confirm the current payoff amount? …Thank you for confirming. I would like to request a lower payoff/settlement amount.” (This is where you reference the circumstances that have made it difficult/harder for you to maintain payments). My personal reasoning was: “Over the past several months I have undergone chemotherapy treatments & with the effects of the current COVID -19 situation, this debt has become a hardship & I am looking to offload this debt.”

This is where the rep will respond with what I like to call their “first base” response – For me the response was “we have a payment deferral through May 15, and that is the only thing we are currently offering.” I responded “Thank you for that information, that helps a bit, but I would really like to see if there’s anything else that can be done to assist me. You have been very helpful, but is there a manager or supervisor I can speak to?”

This is when the smarty pants rep will probably say something like, “sure, but what I have relayed is our current policy, and the supervisor will relay the same thing to you so did you still want to speak with them?” You respond “I do understand, but yes, I would still like to speak with a supervisor as they may be able to further help me, or authorize something more.”  

Note: Make sure you say this right, and NOT with attitude. Tone is everything. This is important because the next, thing they will do is go & get their supervisor, brief them on what you all have been discussing, and if you were nasty with them they WILL relay that too & then that lowers your chances of the rep and/or the supervisor becoming more like a teammate of yours, who is on your side & advocating for what you’re requesting. 

• Example: The first rep put me on hold a few times & was very apologetic about it, but I assured him not to worry several times & made sure he knew I wasn’t annoyed. 

Once on the phone with the supervisor they’ll say something like “So and so briefly discussed with me what you are requesting, and we do only have the payment deferral currently.” I responded “Yes he was very helpful in explaining the current policy, but is there anything else that can be done to further help me?” Getting a lower payoff would really help.” Supervisor responds “I can’t further help here in this department, but I can get you over to a specialist and they can explore further options for you.” I responded “That would be great, thank you.”

Once on the phone with the specialist department, you again relay what you are looking to do & why. Here’s where your negotiating skills really kick in. The specialist asks me what payoff number I was looking for. I say always shoot low first because that is your threshold & beginning point. So let’s say I owed $9000 on this account. 

My response was “well, what would be more manageable for me is $5,000.” Now that is me asking them to settle for $4,000 less than what I owe them. I clearly took a leap of faith with that request, but hey you have to realize that you have nothing to lose by asking and you have not, because you ask not! The specialist responded “one moment, let me see what we can do …ok Kirstin I ran some numbers and we can settle for $6,975.88.” Now that’s roughly $1,900 more than the number I gave. So here’s where you negotiate just like you would negotiate in the merchant markets on vacation LOL, you NEVER take the first offer! 

Keep in mind you don’t want to insult them with your next response. Instead of saying nahhhh can’t do that. I replied “Thank you, I appreciate that number/offer, but that $5,000 number would really help me, do you think/is there any way we can get to the $5,000? She replied “You know what Kirstin, we want to do as much as we can to help you in your situation, let me reach out to my manager and see if there’s anything further I can do.” I replied, “sure, take your time, thank you very much.”

At this point I knew the rep was now an advocate for me, and wanted to help me as much as she would want to help herself just by the language she was using with me & how she was connecting with me. Once she was back on the phone she said what at this point I had a feeling she was going to say. “Kirstin I was able to speak with my manager and we were able to approve you for $5,000, I hope this helps you greatly, what payoff time frame would be feasible for you?…” I thought this was pretty cool, because instead of telling me, they allowed me to tell them what payoff time frame would work for me & how many payments I wanted to make. I went with a total payoff in 90 days with 30 day intervals.

End the call by thanking the rep and make sure you pay attention to the details of the settlement, which brings me to the below things to make sure you are clear on:

Things to double check/ask/understand:

1.     You will likely need to pay off the account in full in a shorter time frame for them to accept a lower settlement – that means that with a $9k balance,  paying minimum payments only would take roughly 23 years & you would end up paying roughly $18,500 in total. Yeah, borrowing money comes at a pretty price. That’s insane. 

• Side note1: My account has never gone into collections, I’ve always been on time with payments & paid over the minimum. I decided to settle because I wanted to get rid of the balance. A personal decision. 
• Side note2: don’t just pay the minimum on accounts. Always pay over the minimum even if it only is maybe $10. It looks better. Also a trick someone mentioned to me is let’s say your monthly minimum is $200, but you pay $250 each month. Instead of making one $250 payment, split up the payment into two $125 payments or 4 $62.50 payments because apparently even though you’re paying the same amount, making more than one payment by splitting it, tricks the system & says to it that this person makes multiple payments on their account, over the minimum, which strengthens your credit score. 

2.     Will my account close as a result of this lower settlement? -Ask Bank/Loan Rep

o   Mine will close after I complete settlement payments, and I am ok with that. This is a credit card I have had since High School, and I have been wanting to switch to a more rewards based card anyhow.

3.     Does this have implications on my credit? – Ask Financial advisor and/or Tax accountant – my FA advised me not to worry about the report to the credit bureau & offloading the debt was better. I like the way a friend of mine, @wavy_ronny , put it. On your credit report, an account closing for less than what you owe is the equivalent of getting one bad grade, it’s on your report for 7 years, may weigh down the score a bit, but you can eventually build it back up. 

o   Another point about doing this NOW in this season is that lenders will not penalize you as heavily for that bad grade. This is because of the current climate of the economy as a whole, many people are being financially impacted as a result of COVID-19 so anything negative on your credit right now will likely not hold as much weight to lenders. 

Any who, hope this helps someone cancel some debt! Be sure to weigh everything for your own individual situation. For example, if you’re looking to buy a home or car or something in the next year, maybe you should wait to do this after you secure your lending. 

I encourage everyone to connect with a financial advisor, you don’t have to be rolling in money to do so, and the younger you are, the better! 

Also, don’t be like me and ignore your parents’ instructions on credit cards. LOL. I really didn’t ignore them, and wasn’t really sure how my credit card balance got super high to where it became a whole bill, but my rule for my new credit card will be to pay it off at the end of every month! This is a tip I read in a finance book a few years ago & one I plan to live by for the future. Something to think about! 

Happy Adulting!