DOOR NUMBER THREE: DEBT NEGOTIATION
Few people realize that there is another solution to burdensome debt, an approach that puts YOU in the driver's seat - that levels the playing field between you and your creditors without having go to court.

That solution is debt negotiation - good old fashioned American haggling. Haven't you ever haggled over the price of a purchase? Well, exactly the same thing can be done for your debts!

Just imagine. If you could wave a magic wand and turn that $25,000 of credit card debt into $12,500 or even as little as $9,000, wouldn't that make a HUGE difference to your financial future? You bet it would! Most people are skeptical that this approach is possible. But if you have a professional debt negotiator on your team, the odds are very good that he or she can cut your debt in HALF or less.

HOW IS THIS POSSIBLE?
It's very simple, actually. Put yourself in the shoes of a manager of a collection department for a major credit card bank. You know that bankruptcies are at an all-time high, that consumers file bankruptcy at the drop of a hat these days, and that the chances of collecting any money get worse as the debt ages. You have the opportunity to close your books on a delinquent account by collecting 50 pennies for every dollar owed by the debtor, or take a chance on never collecting a single penny by trying to hold out for the full account value. You also realize that once the debt leaves your bank (usually after six months or so), it will go to a third-party collection agency. The agency will take at least 15%-20% commission right off the top of whatever they collect, and they are unlikely to collect more than 70% of the debt, even with the most aggressive tactics. So you'll probably never retrieve much more than half the money anyway. When you look at it this way, collecting 50% now doesn't seem like such a bad prospect.

Now, the way we've described it above, it sounds like a piece of cake. You might be thinking, "OK, I'll get on the phone and do this myself." What will happen? You'll reach the "customer assistance team" described above, and the representative will inform you that other banks may settle for 50%, but their bank never settles for less than 85%, under any circumstances. But, of course, they do have that wonderful hardship program for you.

After you've called five or six banks and received the same treatment, you'll probably end up with the idea that debt negotiation doesn't work. The problem is that the banks will rarely take a debtor seriously. Unfortunately, they simply don't believe you and they think your hardship story is phony. The banks are quite prepared for the amateur do-it-yourself negotiator. They have the telephone scripts all set up so that by the time the conversation is over, the caller feels guilty about the money owed, and their lame hardship plan sounds like a great deal after all.

I'm a professional, but if I ever got into a financial pickle, I'd never try to negotiate my own debts. Instead, I'd hire one of my colleagues to do the job for me. I can't emphasize this enough. Just having a third-party professional on your team makes all the difference in the world. There is something almost mystical about this simple approach. Once the banks realize that they are talking to a professional - someone who knows the rules and regulations - they quickly change their tune.

A negotiator will obtain better results than you could ever obtain on your own, simply because all of the bank's tactics are stymied by the fact that they can't talk directly to you. They can't apply psychological pressure to you since this is filtered out by your representative.

Besides, there's no shame in seeking help. Look at it this way: the banks pull out all the big guns when you fall behind. They have an army of collectors ready to pressure you with carefully scripted techniques. They have collection agencies and attorneys waiting in the wings to go after you full throttle.

Doesn't it make sense to level the playing field? Doesn't it make sense to concentrate on improving your finances and let someone else deal with the aggravation of the incessant phone calls that start flooding in once you get behind?

Read on and discover what's behind the negotiation process.

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