When it comes to business negotiations, you’re likely to play your cards one at a time. And if it’s about settling debts with a creditor, an honest, upfront approach works. If you’ve got genuine reasons to delay payments or you are stressing over an overdue amount, let your creditor know. It can help you reach a middle ground concerning payment settlement. With that said, both parties need money, and you, being a debtor, may have to find ways to clear off your debts first.
Here’re a few ways to negotiate with your creditors when you’re planning to settle debts.
Know the outstanding amount
Before you negotiate with your creditor, you should look into your account book to know how much you owe the other party. What’s the total outstanding amount, and how are you going to pay it? Are there any hidden costs? Is there another payment left? When you know about these things, you won’t hesitate. Go through your invoices.
Think if negotiating is a good idea
When thinking about negotiating with a creditor, you have to consider its pros and cons. Ask if it’s a good time to negotiate? Should I save more money so that I can negotiate well? Or should I negotiate at all? All these questions will give your perspective. The point is to position yourself well to avoid looking like a payment defaulter in the end.
You have to be friendly, courteous, and polite to your creditors. It’s you who is on the negotiating side, so you need to think about that. Being aggressive won’t lead the conversation anywhere. It will make the situation worst. So, be polite and humble. Listen to the other party.
We are talking about settling debt consolidation here. So, you should document everything. Take notes or record the meeting. There could be leniency in payment terms: your creditor may be willing to extend the deadline. Or you may agree on a specific amount. Whatever it is, make sure you have everything in writing.
Ask for a deadline
During the negotiation phase, the first thing you can ask your debtor is time. You can ask if it’s possible to extend the payment deadline. Maybe you need time to arrange cash. While you are at it, make sure your tone is humble. Do not appear casual. The tables may turn, and you will have to makeshift. To avoid such a situation, stand firm on your ground.
Until now, we have discussed how you can negotiate and settle your debts. But it’s equally important to know how to avoid falling into a debt trap in the first place. When you can develop a habit of paying your dues on time and check your credit history once in a while, you may reduce the debt risk. Your business credit information report says a lot about your financial habits. Make sure to do the right things in business so you can make money.