Did you know that you don’t have to pay other people to manage your debts for you if it gets a little beyond your control?

We’ve all seen the commercials for debt management help, where they show the stressed out mom with her hair all mussed up and the back end of the pencil all chewed and she just can’t get all the bills paid, and “they’re there to help”. These commercial are so very irritating to me.

Don’t call them! They’re going to charge an administrative fee just to do this for you, that’s what they make their money from. They are in it for the money, just like everyone else.

Call your creditors yourself, but before you do, read these tips so you can be prepared:

1. Figure out the amount you can pay to each creditor each month and write it down, you can discuss with the creditor how long you’ll need to maintain this payment. Later when you make that phone call you’ll need it.

2. Give yourself a pep talk. I know it sounds silly but you need to build yourself up for this, creditors are trained to extract money from you, so be ready to stand your ground.

3. Consider all of your options before trying to negotiate a settlement or a smaller payment agreement. Is there something you can get rid of that is a monthly drain on your finances so that you can continue to honor your obligations? Understand that when you take this step to negotiate debts that may be going bad but still look good, you’ll lose the use of any credit accounts you have under negotiated terms usually.

4. No matter what those creditors threaten you with, they cannot send you to jail. In addition, if you check your states’ regulations and there is a clause against seizure of property, creditors are not allowed to seize your belongings either. Texas is a no garnishment and no seizure state, only the IRS is exempt of this state law.

5. Consider carefully the debts you will be negotiating, if the debt has been bad for two years or more, it’s a safe bet to leave it alone. Use your disputing skills to try to get it off your credit report, but negotiations don’t usually work by this point. The point of negotiating debt is to protect your good name with companies you can salvage your relationship with. You want what’s reported to your credit report to be good, if an account has already gone bad for an extended period of time, it’s best just to try to settle it in a lump sum, a lot of companies authorize their representatives to agree to settlements of 50-90% less than the original amount owed.

Now you’re ready to make those calls. Are you really ready? No more using those accounts and you’re taking charge of your personal credit future. Be proud today is the day you take a step forward to financial freedom. When you’re free of debt, it’s an amazing thing.

Copy everything you send or receive regarding these negotiations. When making these payments, use traceable money i.e. checks or money orders or cashiers’ checks, I don’t recommend money orders unless they’re from a nationally recognized bank like American Express, otherwise they’re very hard to trace.

Ask the creditor if they can suspend the interest charges from accruing while you’re in repayment. This is the one benefit that I can see to using a debt management company versus negotiating your own debts, some of these companies work enough with creditors that they can stop the interest charges from accruing so you’re not sinking further while you repay.

Anything you send by mail, send certified, receipt requested.

Before you end each call, ask for confirmation of this agreement in written form from your creditor, mention you’ll need that before you can send any payment.

You should also have written down the name of the person you’ve spoken with, the date and the time. Include any details about payment arrangements or settlement amounts, if they negotiate in terms of percentages, ask them to also break down the dollar amounts. Everything needs to be very clear and concise and understood well on both sides.

Finally, if during the negotiations with the creditors, you find yourself becoming frustrated, the conversation becomes heated, or you become in any way uncomfortable with the tone the call is taking, politely end the call and call back another day. It’s not prudent to become angry when you want something from them. In order for this to be a win-win call, you have to maintain your composure and be nice as you can be. :)

Good Luck!