You are free to negotiate with a creditor. And it is often wise to have a lawyer help you do so.

In some cases, a creditor may be open to negotiation to reduce the amount of the debt or in some way alter the terms of its repayment to make it less burdensome to the debtor.

Why would a creditor do this? Mostly because he wants to get paid and turn his attention elsewhere – as the old adage goes, half a loaf is better than none. A creditor may make the analysis that the time invested in pursuing the debt isn’t worth it and thus may be interested in negotiating a settlement. This is especially true where the creditor becomes convinced that he may face real resistance should he attempt to enforce the debt through litigation.

These kinds of negotiations aren’t something laypeople generally want to do on their own. Negotiations can be complex, and you have to know what to ask for, what’s reasonable to expect, and how to approach the subject. Negotiating settlements is a core part of the services Schlanger & Schlanger offers. Please contact us so we can discuss your case and whether negotiations are in order.

Will negotiations work in your case?

Every situation is individual, of course, but there are certain principles that generally apply.

Cash is king – If you have cash that can be put towards paying off part of the debt, the creditor may be interested in negotiating with you since that increases the likelihood of his being paid sooner rather than later.

Imperfect information – If you can demonstrate that the creditor’s information about you and the debt in question contains mistakes or is incomplete, that can increase the chance the creditor will be open to a settlement. Flaws in his information weaken his case should the matter go to court; therefore he is more likely to want to negotiate a settlement.

Age of the debt – As a general rule, the older the debt, the harder it is to collect, since the passage of time tends to make it more difficult for the collector to make his case and because debts eventually become too old to enforce in Court under the relevant statute of limitations.