Negotiating with my creditors

[TAS]

For the past six months I have been dealing with an increasing number of calls from creditors and collection agencies as a result of the nonpayment of my debts. I have entered into a debt management plan (DMP) with a financial institution that specializes in these matters, and fortunately the process has been going smoothly thus far.

I have several questions, however, in regards to the negotiating tactics used by my debt management plan and any potential tactics I could use myself.

The first realization I made in entering a debt management plan is that they have every incentive to wait for my creditors to become desperate. It seems that they are waiting to negotiate with my creditors until all my debts have been written off as bad or have been with a collection agency for a considerable amount of time. Is this appropriate for my DMP to use these tactics? And if so, at what point would I have a genuine greivance against my DMP for refusing to contact and negotiate with my creditors?

It has been six months since I entered the plan and they still have not settled any of my debts. I receive a dozen calls a day from different collection agencies with no end in sight. My debts are now all considered bad and thus will be on my credit report for seven years.

In addition to the debts that now reside with my DMP, I also have a large balance due from student loans. Since the DMP is either unable or unwilling to include student loans in their plan, it is necessary for me to negotiate myself with the financial institution underwriting the student loan.

Are there any tactics or useful approaches I should take when discussing repayment of my student loans? The student loans are private and exceed $40,000. Is it appropriate to demand that they lower the total balance, thus "forgiving" a portion of this debt? Or is that simply not done?

Any information you can provide in negotiating with my DMP and my student loan provider would be greatly appreciated. At the very least, you will be lowering my stress level with discussing this with financial representatives.

You really have to be careful in selecting a debt managment company. I dont see how waiting for your accounts to be written off and then trying to settle with the company is debt "managment". Creditors do not become desperate and they dont have to settle, not ever. You should find a debt managment group that will negotiate a lower monthly payment, suspension of interest and late fees while you are paying. This way your credit report will show slow pays for the time that you were behind on your bills prior to debt managment. When I worked collections I often refered customers to CCCS which is part of the United Way network. They actually help you make regular payments to your accounts and creditors agree to not call you for collections as long as you stick to the terms of the contract. Also know that no creditor or collection agency every has to accept debt managment contracts, make settlements or accept smaller payments than what is due on your original promissory note. Student loans usually will not work with credit counseling but are usually more lienient than other lenders. If your loans are not in default already, contact the lender directly and try to work out a graduated payment schedule, or a deferrement. The probability of them forgiving a portion of the debt is highly unlikely unless you qualify under some special program, like teaching in a rual area or something like that.

[ponyislandgirl]

I have also been working with a debt negotiator. It's been almost a year and nothing has been paid off. I have to go to court on Thursday to settle with a creditor and guess what? I go by myself! I've called them endlessly about this situation and keep getting the same story,they are negotiating a settlement, but if it's not settled by the court date I have to appear. I contacted the creditors attorney and they told me no one was negotiating with them. I have contacted the BBB about this firm, and emailed them asking for an explaination of what they have done with the money I've paid so far. I've paid enough that I could have paid of this creditor and others. I also asked them for a full refund if they are not going to do as they advertised. I think we've been scammed.