How to negotiate your bills and your debt



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Last week, I talked about ways to reduce monthly payments on your debt. Some strategies included finding better deals to take on some cheaper debt, and others making an extra effort to pay your debt faster and reduce the interest paid.


Unfortunately, it is not always that easy. Sometimes, bills are due, and money is tight, or paychecks are late. Before resorting to bankruptcy and other extreme solutions, know that a little negotiation can go a long way.



Negotiate your bills


No one likes a bad debtor and your phone, internet or utility company is no different. Which is why before they start spending a lot of money on trying to have you pay your bills, they would rather accept easier terms for you to repay.


Try to call your creditors BEFORE you are not able to pay your bill. You can ask for the current bill to be spread over the next few months, if your cash flow problem is just temporary. I pay my electric bill based on the monthly average of last year’s consumption. If I have trouble paying my bill in summer, I can  take a meter reading, tell them that I have overpaid so far, ask them to skip the next payment, and to pay more in winter. Those arrangements should bear little or no interest.


I recently checked my homeowner’s association bills, and saw that I had a two months credit. A simple phone call made them stop the payments for the next two months and freed up some cash flow.


Make sure you are paying for what you use. In the case of electricity, that translates to a meter reading, for cable and TV, to the channels you use. Remove the sports and entertainment package until you are back on your feet. Showing that you are willing to cut on your side will entice the company to be more clement.


Do not be afraid to call several times, if you don’t succeed at first. Keep your emotions in check and calmly ask for a payment plan. Depending on who you talk to, you can succeed after a few tries.


Always offer a solution. ”Sorry, I can’t pay” is not quite it. Empathize the fact that so far, you have always made payments on time, and offer a payment plan that suits your current needs.


Negotiate your debt


If you are struggling to make payments on your credit card or consumer loans, negotiation is also an option. Credit card companies do not want you to default on your debt because it is unsecured debt. That means they can’t go after your car or your house if you default. They would have to hire people, pay for phone calls, trips to your house, and a lot of legal fees. A lengthy and costly process with no guaranteed outcome they would rather avoid. In most situations, they will agree to settle for a fraction of the amount owed instead.


Again, if your situation is temporary, review your contract. On my consumer loan, I can ask for a repayment holiday once a year. The interest would keep accruing and I would pay just a bit more from the next payment.


You can try to call your credit card company and ask for the interest to be frozen while you repay your debt. It will save you a lot of interests. Even if you can’t make the minimum payment, try to repay something. $10 or $20 per month, as a sign of good faith, while the negotiation is going. Prepare a layout of your monthly income and expenses to justify your request.  Review how much you have paid in principle and interests so far compared to how much you owe. If you took a $1000 loan and already paid $200 in principle and $200 in interest, you owe $800, but the company will likely agree to cut it to $600 with no further interest to get the money back.


Not getting the terms you were hoping for? Some companies do that for a living. They will call your creditors and ask them to lower your debt on your behalf. They do charge a fee, however, the payment plan they offer could be better than the one you would get on your own.


How much can you save? It depends on what you owe.   You can check a debt repayment calculator to see how much a negotiation can save you. Be sure to understand the impact on your credit score and your future borrowing options.


Have you ever tried to negotiate your bills or your credit card rate?

This post was written by me and brought to you by




A 30 something French girl embarking on a journey towards Financial Independence. I blog about money, travel, simple and deliberate living, freedom and choices. You can find me on Twitter, Google+, or Reach Financial Independence's Facebook Page

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  1. Back in the AOL days, whenever a promotional deal was about to expire, I would call to cancel and get the price extended for another 6 months.
    Edward Antrobus recently posted..How to Identify Good and Bad Places to Buy GasMy Profile

  2. Veronica @ Pelican on Money says:

    It’s like that one time I got a toll road fee and I emailed them to have it reduced because it was a mistake. Lucky for me it went from $100 something to $31! Sometimes just asking will save ya money! I just wish I could remember to do this with all the bills / fees.
    Veronica @ Pelican on Money recently posted..Business WisdomMy Profile

    • I often ask my bank to wave fees, sometimes because they are sneaky and just subscribe me to a new useless service, or because I don’t check my account, forgot there was an automatic payment and go overdrawn for a few days. It happens once a year maybe so they don’t mind cancelling it.

  3. One thing that I think more people should try to negotiate is health care bills. Sometimes you can get on payment plans, even if it’s just for three months vs. lump sum payment. Spreading out these huge costs can really help.
    DC @ Young Adult Money recently posted..The Costs Involved in Sinus SurgeryMy Profile

  4. Great point on negotiating bills and contacting the lender. By being proactive you can generally win yourself some points in their eyes which will make them willing to work with you.
    John S @ Frugal Rules recently posted..November Blog Goals UpdateMy Profile

  5. We have satellite radio in our car and when we call to cancel they put us on another ridiculously cheap package (less than half price each time) for another few months. We’ve called up to cancel and negotiated a better rate about 4 times now!
    Jon recently posted..Free alternatives to cable TVMy Profile

  6. maria@moneyprinciple says:

    We do this regularly with bills; haven’t tried with CCs (apart from moving to 0%, of course). Worth investigating.
    maria@moneyprinciple recently posted..Osborne’s Autumn StatementMy Profile

  7. In the course of my life I’ve tried that with credit cards and had no luck, but I do that with my cable company all the time. It’s amazing what they come up with when they realize they are about to lose business.
    Budget & the Beach recently posted..Big Things AwaitMy Profile

  8. I constantly change my cable and cell phone plans! They always offer some form of discount when push comes to shove.
    Catherine recently posted..Money That Would Have Changed My Life.My Profile

  9. Yes, I have tried to do that and ended up just getting an increase in my credit limit!

    I don’t want credit anymore. I am afraid of it. As soon as I get done with my “circumstance” the only debt I want to have is my mortgage. I hope to stay debt free

    Lesson learned for this chicky!
    DebtGirl recently posted..Puzzle Piece Ornament – Success!My Profile

    • Sorry you had to learn the hard way. Negotiating is a hard skill, I suck at it so I usually call the companies many times before one person accepts to lower my bill!

  10. You never know until you ask. The worst they can say is no.
    Kim@Eyesonthedollar recently posted..Do Your Purchases Reflect Your Values?My Profile

  11. Keep in mind that you should always look for the senior citizens were aware of the very legal and available
    options for debt program, but very few are worth pursuing.
    They work with creditors across the country. Debtors are advised to find
    out how you can afford to meet your monthly obligation.

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