For the past 12 years I’ve made my living as a professional negotiator. Specifically, I’ve assisted normal, everyday people (i.e. consumers and small business owners) in helping them avoid a possible bankruptcy filing by negotiating settlements with their creditors for less than full balance. Most of the settlements have been for $0.50 on the dollar or less.
Looking back, there really was no manual or playbook that taught me how to negotiate. I pretty much just figured it out on my own through thousands of trials and errors.
Want to know my secrets? Ok, no problem. Here they are. For real.
What follows are the six critical elements of my negotiating style that have helped to settle millions of dollars of debt with all the major credit card companies, collection agencies and attorneys. These elements are field-tested and they work.
Define Your Outcome. Seems obvious, but before you do anything you need to know what it is that you want. What settlement amount(s) would you be satisfied with? Don’t just say, “I want the lowest settlement possible.” That’s wimpy and vague. Be direct and say something like, “If I could settle this $20,000 account for $12,000 or less I would be satisfied and that would give me the financial breathing room that I need.” Also, what’s your timeframe? Do you have a deadline of finalizing everything within 30 days or are you prepared to take your chances and wait for the right situation to (hopefully) materialize. I’m not saying that you don’t have to be flexible as you proceed, because you do. No one that I know of can predict the future with 100% accuracy, but you at least have to be open to revising your initial objectives if conditions change. But in order to get things started you do need a tangible target to give you something to shoot for. Otherwise you’ll simply wander aimlessly and never really know if/when you’ve achieved your outcome.
Assess The Situation. It’s one thing to define your outcome and be optimistic, but it’s another thing to accept the statistical likelihood of your outcome actually materializing. For instance, I’ve had people want to hire me to settle their outstanding debts for $0.20 on the dollar, and not a penny more. My response to them? “Keep on truckin’, Bubba. I’m not your guy.” While it’s true that we have settled debt for extremely low amounts like that, it doesn’t happen every day and I’m certainly not going to take on a client with such rigid demands right out of the gate. So after you’ve decided what it is that you think you want, you might want to get an opinion from a trusted source to assess your situation and give you their opinion on what the probability of achieving your outcome is.
Research, Research, Research. Now it’s time to formulate your plan of attack. But before you start doing a bunch of “stuff” just for the sake of taking action and being “proactive”, I would strongly suggest that you attempt to learn as much as possible about your opponent before proceeding. Kind of like doing a scouting report. What are their strengths? What are their weaknesses? What are their tendencies? What type of results have you achieved with them in the past 6 months? Do you have a specific contact within that company that you’ve worked with successfully in the past? Is there a specific departement within the company that is more favorable to work with than others? If you’re not familiar with the company you’re going to be dealing with, is there any useful information about them on the Internet? Why do you think professional sports teams have people on their payroll just to scout their opponents? Because it’s that important.
Use The Correct Tactical Maneuvers. Should you attempt to negotiate a settlement over the phone or should you submit proposals in writing? Or a combination of the two? If you’re going to submit a proposal in writing do you fax it to them, mail it to them or send it FedEx? Depending on the situation you might need to use all of these methods? Regardless of whether the situation calls for written or verbal communication, what exactly do you say? This aspect really hits home when you’re sitting at your desk with a blank piece of paper in front of you. And what if they agree to settle? Now what? You need to make sure you take the necessary steps to insure that the settlement agreement is permanent and final so this matter can’t come back and bite you at some point in the future.
You’ve Got To Have The Right Personality. A lot of people in this world talk a good game, but talk is cheap. I’ve had clients pee their pants when confronted with an aggressive bill collector. Money can be a very volatile and emotional issue, so you have to have the right temperment to do this type of work. You and only you know whether you’re up to the task. If you’re not, just accept it and get help. It’s not a sign of weakness and it’s nothing to be ashamed of.
Trust Your Intuition. This is probably the one element that separates the men from the boys. Call it your gut feeling, your sixth sense … call it what you want. But tapping into the world of subtle energies and expanded awareness has been my # 1 secret weapon for seeing opportunites and avoiding danger, not just in my negotiations with credit card companies and collection agencies but in life. If you listen closely, your intuition will tell you when to take action and when to stand still. Your intuition can give you an enormous amount of insight into your opponent and what their next move might be. Some people have developed their sixth sense to communicate with the dead. But for me, I use it to help people solve their financial problems. 🙂
Now obviously there’s tons more we could talk about regarding the subject of how to negotiate settlements on credit card debt, however that’s beyond the scope of the this article. But at least you now know the six key elements that I use to this day to do what I do. (And I’m pretty good at what I do!)