How to Negotiate Discounts for Paying Early

Remember the saying, 'cash is king'? It is true. Cash can be a driving force when you are buying something. If you are a cash buyer it is good to understand the value to the seller of your paying cash. When you pay with a credit card, the seller pays fees to the credit card company. If you pay over time the seller loses interest on the cash. So the seller has a reason to value cash.

Tips on how to negotiate discounts for paying early when buying:
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1. Do your research to understand the value of cash to the seller:


  • Determine the cash differential the seller loses when selling to you on terms.

  • Gently question the seller to see if he or she might have a need or other use for cash at the moment.

  • How badly do they need to sell? If you are willing to pay cash, at a discounted price, but unwilling to pay the full price on any terms then the seller must decide to sell at your price or lose the sale.

2. Determine the value of the cash to you:


  • The interest you would lose.

  • The lost benefit of not using the cash for another opportunity.

3. Make a cash offer discounting the price by twice the assumed differential value to you or the seller.

4. Be prepared to walk away from the negotiation if the seller will not offer a reasonable discount for a cash payment. If it comes to this, by indicating you are willing to walk, the seller may come back with a viable 'final and best' offer acceptable to you.

There are also opportunities for paying obligations early. Such obligations may be to landlords, lenders or other sources of credit. How badly do they need cash? If you are willing to pay down a note or prepay rent you should get a fair return for doing so.

Tips on how to negotiate discounts for paying early on obligations:

1. Do similar research to understand the value of cash to the landlord or lender and to you:


  • Gently question the landlord or lender to see if he or she might have a need or other use for cash at the moment.

  • The interest you would lose.

  • The lost benefit of not using the cash for another opportunity.

3. Make a cash offer discounting the obligation by twice the assumed differential value to the landlord or lender.

4. Be prepared to withdraw your offer to pay early if the discount is not meaningful. If it comes to this, by indicating you are willing to walk, the landlord or lender may come back with a viable 'final and best' offer that is acceptable to you.

Cash is important today. The most important aspect of having cash or receiving cash is the opportunity value of using it wisely. Understanding how to negotiate discounts for paying early or in cash can help you save money.

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How to Negotiate Credit Card Debt

The most important aspect of personal debt restructuring is to ask before you get in too deep and before the lender sells your debt to a collection agency. So it is more important than ever to learn how to renegotiate credit card debt before one is forced into bankruptcy court.

Renegotiating debt is best done before you are too delinquent. Debt can be restructured a number of ways. Here are some ways to help you preserve your ability to control the restructuring of your debt.

To learn how to negotiate credit card debt consider these negotiating tactics:

  1. Do not wait until the debt has been sold. By then it is too late to deal with the bank personnel who might have an interest in helping you. The third party's only motivation is to make money off your bad situation.
  2. Before you seek debt relief, develop a personal budget that is viable and a plan which you can handle. Now you are ready to lift the telephone and negotiate your credit card debt.
  3. Don't be afraid to ask for help. Advising the lender of a looming problem allows them to help you avoid it becoming a major issue and saves them the time and effort of writing it off.
  4. Be persistent when negotiating credit card debt. "No" is easy for creditors to say. You will hear it a lot. Call back and try to get to someone else. Talk to the same person repeatedly until they begin to get to know you and start wanting to help you.
  5. Be pleasant on the phone and in person. You need to develop a rapport with the other person so they want to help you. Getting mad often makes things worse. Besides, you have little to threaten with so avoid creating an atmosphere of a confrontation. You will lose.

You have a cash flow problem that is about to become the lender's problem. You have to have a viable solution to offer the lender that makes more sense to them then selling off your debt. They have to be enticed and motivated to listen to you. Your challenge is to negotiate your credit card debt in a fashion that allows you to stay afloat. Theirs is to mitigate their losses. Your plan has to be better than their alternative.

The most important aspect of credit card debt restructuring is to ask before you get in too deep. A good customer's case always sounds better than a plea from a habitual problem customer.

How to Negotiate a Lower Rent

Just because you are not a real estate professional does not mean you cannot negotiate a lower rent. Anyone can identify a problem, develop a solution, and present it for consideration. Those are the basic steps when appealing to a landlord for rent relief.

Here's how to negotiate a lower rent in three easy steps.

Identify the Problem
You know you can't pay the rent. But do you know why? If you have had an unusual, unexpected expense that is a readily understandable. If you have a recurring cash flow problem or are habitually behind in your rent that is something else. Before talking with your landlord you will need to identify the cause of your cash shortage so you can explain your situation clearly and concisely.

Develop a Solution
Landlords need to understand your situation and know that you have a way to get back on track. This plan should include the reason for your cash flow problem. It should also show what you are doing on your own to cut expenses. Finally, put together a short budget that shows how much rent relief you need along with your cuts to make it through the problem.

If you have an emergency, then the plan can be simple. You need short term relief to cover an unexpected and non-recurring problem. You will want to prepare a schedule that show with the landlord's help and the things you are doing, provide specifics about your attempt to reduce expenses, you can get back on track in a set amount of time. Your request may be to reduce rent for 90 days and then repay the rent relief over 180 days to ease your cash flow.

If you have had a permanent set back in cash flow then your plan will be a little more aggressive. Be prepared to share with the landlord that you have lost a certain amount of income and while your personal cuts in expenses, again you will want to be specific, cover much of the shortfall you need help in the form of a permanent rent reduction.

Present Your Plan and Request
Ask to meet with the landlord then explain your situation. Don't start off simply asking for help. You want to draw them into the conversation about how times are hard, you have been hit with a problem and you are working on a solution. The approach to the landlord should be that you need him or her to be part of your plan to get back on track; you are looking for their help.

Once you have their attention, lay out your plan and how you want to get back on track. How you value their help and enjoy renting from them. Tell them specifically what you need and why. This is when having been a good tenant will pay dividends. If you have thrown too many parties or been a problem tenant you can expect a comparable reaction.

Likely Landlord Reaction
Landlords have needs of their own. They are in business to make money and have to service their own debts and pay their expenses. You are asking them to give up income, actually bottom line profit, that they are rightly due.

You can anticipate outright rejection, a counter-attack in the form of the story of their cash flow problems, or a willingness to work with you. Hopefully your landlord values your tenancy enough to try to work with you. If so, this is where the negotiation begins.

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How to Restructure a Commercial Lease

There are many reasons to restructure a commercial lease. The reasons can range from securing more time for a flourishing business to reducing the rent to survive. Knowing when and how to restructure a commercial lease is part of doing business.

There are a number of ways to approach the challenge of restructuring a lease. The key is to understand your needs, develop a plan, and present the landlord a well thought out proposal that addresses the landlord's needs as well as your own.

If you want to learn more about how to restructure a commercial lease consider these techniques.


Learn what the landlord can do - Knowing what your opponent is able to do enables you to target your requests or choose which issues to address.

  • Determine the loan status as part of your effort to restructure a commercial lease. A landlord who has just acquired a property is likely to have a new, large loan and a lender who controls many decisions. A recently refinanced shopping center also likely has more stringent lender controls than a center with an older, seasoned loan. Find out the loan status by asking or simply pulling a recent title report.
  • Find out if co-tenants have gotten help before seeking to restructure a commercial lease. Landlords also hate to set precedents with tenants; especially when the precedent lowers rental rates. Talk to your cotenants to see if any of them have gotten rent relief or other assistance.
  • Discover what the landlord will do if you leave. Consider how your lease compares to deals currently being made. If you are not in a multi-tenant center, gather what other landlords are getting for comparable space. This will indicate what your landlord can expect to do if you leave.

Prepare a plan to restructure your commercial lease to present to the landlord - Don't approach the landlord with your hand out expecting a break. This is business. A professional approach will yield better results.


  • Be prepared to share how you are doing in the business by providing the landlord your sales history and profit/loss history. Before the landlord should be expected to reduce your rent he will need to be convinced that you are truly in need of help to stay in business.

  • The value to the landlord in restructuring a commercial lease is to keep you as a tenant. That is, to keep the lights on in your space. You need to be able to show how rent relief will make your operating numbers viable to allow you time to build sales and regain stability.

Sell why your plan to restructure your commercial lease will benefit the landlord - if you want help you will have to convince the landlord that helping you will in some fashion be of benefit to him. Before he can utter the word 'no' you will want to demonstrate why he should say 'yes'.

Develop a short be meaningful list of the reasons that you would consider your proposal of you were the landlord. These benefits will be best derived from the research you did about comparable rents and vacancy factors in the area. By helping you the landlord might avoid a vacancy, having to re-let the space at a lesser rate while incurring the costs of re-letting, or simply having the space dark and diminishing the appeal of the center to customers and co-tenants.

What do you want from a restructure of your commercial lease - make sure you are asking for what you need. In some cases rent relief will only slow the inevitable.


  • If your losses are such that rent relief won't get you out of trouble or stay the day you have to close, you might be better to seek an early termination of the lease.

  • Maybe your rent is pretty cheap and what you really want is for the landlord to do a better, more aggressive job of marketing the center to bring in more customers. Maybe there is a co-tenancy issue that is suppressing your sales.

  • The point is to identify the reason you are struggling and then address that problem head on rather than simply seeking rent relief as it is the obvious way a landlord can help.

If you don't have the time to restructure a commercial lease yourself consider hiring an advocate to do this for you. There are many different types of professionals who do this time of work including commercial real estate brokers, financial advisors, management consultants and attorneys. They can be hired to advise you on how to approach the landlord or actually do the negotiating on your behalf.

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How to Negotiate with a Collection Agency

Everyone falls behind in payments from time to time. No matter the reason, once this happens the last thing you want is to have the amount referred to a collection agency. When that happens, you lose the ability to deal with the original company because they sell their bad debt at a heavy discount to the collection agency.

Ideally you can act before the debt is sold and negotiate a discounted payoff that saves you the aggravation of dealing with a collection agency. If not, you will need to know how to negotiate with a collection agency. Here are some tips.

Collection agencies make their money by collecting more from you than they paid for the debt originally. More important, they know they will never collect on some of the debts they buy so they have to make up that lose from.....you!

To negotiate with a collection agency you have to appreciate their motivations:


  • Money - They acquired your debt with the intent to make money.

  • Time - They longer they hold your debt the more interest it costs them on their money (what they paid for the debt).

  • Success - They have factored in a number of debts that will never be collected. To do a deal with you offsets another they will not be able to close.

That is all you have to work with when trying to negotiate with a collection agency.

The best strategy is to try and balance time and money in a fashion that the person on the phone becomes motivated to work with you. What will not work are tactics designed to make them empathetic such as a sad story about your troubles, how you were wronged, or the potential of future business if they work with you.

You will be dealing with an accountant type of person who is not associated with the original company or lender. They have no interest in you or your future actions. They want your money, they want it now, and they are very practiced in what they do.

Usually the person you are dealing with is on a commission or bonus plan. So you need to find a way to get them a bonus without paying too much.

What to do:

First don't let your debts go to collection agencies.

Second If you failed the first step, understand that the credit agency will typically buy the debt at the discounted face value of the debt excluding interest or penalty charges. That means they have paid something under 50% of the original cost of your debt. That is their cost basis. They will have handling costs and the burden of other debts they can't collect on to add to their cost basis so I would assume their 'all-in' cost will be around 50%. You can expect to pay more than this amount to settle with them.

Third Your leverage is time and cash. Determine how much cash you can afford to pay immediately to resolve this matter. That amount will be your best and final offer.

Fourth Approach the contact at the collection agency:


  • Start a dialogue trying to establish some sort of relationship on the phone.

  • Work your way around to saying that you want to work something out to get this off your credit rating. Your real goal is to resolve the obligation but having a red herring on the table makes it easier to back into your offer.

  • Try to get the interest and penalties waived before discussing the settlement.

  • Offer 50% of what you owe in principal.

  • Let the negotiations begin.

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How to Get Out of a Commercial Lease

There are times when a business must close in a location. This is usually because it is losing money at the location and the business can no longer service the lease without jeopardizing the company as a whole. There may be other reasons for closing such as the trade area changing demographically or a major tenant leaving the center.

Whatever the reason, this is a business problem; not a personal failure. Treat it as just another challenge to be overcome.

To learn how to get out of a commercial lease consider the following.

What Do You Want?
Closing is often the obvious solution but not necessarily the right solution. Each case is different. Before embarking on termination discussion with the landlord you should be sure you have considered the options you may have. If the location is in a very busy center and demand for space is high, you may have an asset to be sold rather than given back to the landlord. If there are a lot of vacancies you should be prepared to have to pay to terminate early. If you are moving to get into a larger space or different area there may be ways to enlist the landlord's support. If the reason is a personal health issue or other family pressure it is as important to understand this need as thoroughly as a business driven need.

The reason for the change will provide insights into what your options are. To negotiate or get out of a commercial lease you have find a way to get the landlord to agree. The last resort is to simply pay your way out or, worse, default and turn control over to the landlord.

Quantify the Benefit to You
The benefit to you is important because when you get out of a commercial lease early you will likely have to compensate the landlord to do so. That means you should quantify the value to you to leave early so you don't agree to pay more than the value you are getting.

If you are relocating to another location the difference between the net profit of the new location and the net profit or loss of the current location is one way of looking at the benefit to you. Another would be to assess the additional time you would have to handle a personal situation, go back to school for an advanced degree, or other less tangible benefit. Whatever the benefit you need to try to put a value on it so you can measure the cost of getting out of the lease against the benefit to you.

Identify The Impact on the Landlord
As with most things in life, when there is a benefit there is a cost; when something goes up something else comes down; the Ying and Yang thing. The benefits of getting out of a commercial lease will likely be offset by the inconvenience or cost to the landlord to re-
let your space.

Understanding the cost to the landlord will help you assess if his termination terms are fair or egregious. The landlord will have to absorb the loss of rent until he gets the new tenant paying rent. This includes the time to find a tenant, sign the lease then any free rent the new tenant requires to convert the space. The landlord will also have a real estate commission to pay and legal fees for preparing the lease. Then there is the rent he will be getting as compared to what you are paying. If less, that is a further cost but if
the new rent is higher, then he will have an offsetting benefit.

What Will the Landlord Do with the Property
In preparing to sit down with the landlord to negotiate an early lease termination you should canvass the market to understand the likely redeployment strategy of the landlord and projected results. One way to address this problem is to assess why you failed in the location if that is the case. The reasons for your problems may relate to the center or the trade area and, if so, will probably cause the landlord to change the use of the space to make it more viable.

This is a great time to pay a consultant or broker to assess the trade area and give you an opinion of the highest and best use for your specific space within the trade area. Along with that opinion the brokers should be able to estimate how long it will take the landlord to find a new tenant and the estimated terms of the new lease. This information obviously helps you in your negotiations and is worth the cost to assemble a package to share with the landlord at the right time.

Get Creative
Unless you want to pay a lot of money to get out of a commercial lease you need to identify other ways to motivate or compensate the landlord. For example, if you are moving to get into a larger space or different area consider asking the landlord if he has other centers in the area to which you want to relocate or other spaces in the existing center to better fit your needs. Trading locations may meet both of your needs. Another option might be to find someone to take over your business and the lease. Offering a replacement tenant is obviously far better than a vacancy!

Communicate!
As with any negotiation communication is critical. You should be prepared to state your case clearly and concisely and provide documentation to back up what you say. If you are claiming to be losing money at the location, bring operating statements or tax returns that show your loses. It is your job to convince the landlord to help you. Facts always help in establishing the legitimacy of your case.

Sit Down with the Landlord
Getting out of a commercial lease will not be easy unless your rent is way under market. The best strategy is to meet with a decision maker to make your case directly. How the person initially reacts will provide valuable insight into how you will want to refine your actual proposal to terminate. The first meeting should be just to broach the subject of an early termination and gauge how the landlord reacts and develop options that may offset any financial compensation need to achieve your objective. Be prepared to have several
meetings with the landlord each time trying to learn best how to advance you cause. The
time you spend should yield real dollar savings in the final analysis.

If you don't have the time to do this yourself or if there is another reason consider hiring an advocate to do this for you. There are many different types of professionals who do this time of work ranging from commercial real estate brokers to financial advisors to attorneys. They can be hired to advise you on how to approach the landlord or actually do the negotiating.

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How to Negotiate the National Deficit and Debt Ceiling

We are all watching as our representatives in Washington struggle over their negotiations.

Much can be learned watching this political theater.

The most important negotiating tip to take away from this is:

Do not go to Washington to learn how to negotiate!
It is obvious that most people in Congress regardless of their political affiliation forgot long ago the basic tenants of negotiating.

Integrity is definitely lacking when bending the truth on national television is the norm. Double-speak and falsehoods are now an accepted part of the national dialogue.

Honesty is lost when terms are changed after agreements are struck or proposals are rejected before being considered. Honesty is more than not lying. In negotiations it includes having the honor to respect one another and consider fully each proposal.

The desire to get things done, an essential characteristic of an effective negotiator, seems lacking on the part of all involved. It appears most of our elected representatives are content with worrying more about the next election than the Country.

If we are to believe what we hear, we are out of time to get things done . Those in Washington have had ample time to negotiate the debt ceiling or address the national debt but the political posturing and antics have taken away that luxury. When rushed negotiators make mistakes. We can expect a very big mistake to be made in Washington!

Being informed is essential to a negotiator. In Washington so much time appears spent on spinning the message that there is little time to actually understand the fullness of the problem and evaluate proposed solutions. The general consensus is that none of the current plans do anything to solve the underlying problem; our deficit spending. Effective negotiators do not waste time. Posturing and bluffing in negotiations takes time which is rapidly running out. An able negotiator knows when to settle down and work on the problem. Our collective representatives seem to have lost that perspective.

A final observation. In this negotiation between power players there seems to be little power wielded. These reputed power players have been left with the sole strategy of merely blocking each other rather than actually moving the discussion forward. The President has been cut out of the actual fray. The Senate killed the House bill without considering it. And the House killed the Senate bill before it formally arrived.

The result is a stalled negotiation with time running out. This appears to be the perfect setting to see the negotiators forced into making a big mistake in terms of solving the problem. They may reach an agreement but it will likely fall short of solving anything.

How to Negotiate a Loan

Everyone at one time or another has the need to arrange a loan. Most of us will do this many times when buying homes, cars, even appliances. Loan negotiations should be approached with care and consideration as there are many ways to arrange financing and the easiest are typically the most expensive.

Anticipate If You Will Need Financing Before Negotiating a Loan for a Purchase

The biggest mistake when people arrange financing is that they don't anticipate needing a loan before starting the process of negotiating for the item in question That is, they focus on the home or car or television and try to get the best price for what they want. Then they are presented the financing terms by the person selling them the item. By then they are tired of the process and only want to get home and enjoy their recent acquisition. Unfortunately, it is the financing that can make a good buy an expensive acquisition. Before going on a buying spree consider how you will buy the item. If you know you are going finance it, consider setting up a line of credit with your bank or other lender so you do not have to take the seller's financing unless that is better than what you have arranged.

Develop Relationships

As with any negotiation, you will want to spend time getting to know the people you are dealing with before having to talk turkey. Tellers at your bank are not able to give you the best financing terms but a loan officer who knows you, your situation and your expectations can be groomed through regular contact on your art to help when you decide to take out a loan or line of credit. Cultivate a relationship with a loan officer when you are in the bank so that you have a "history" to use when you need a favor.

Why do you Need a Loan?

Discuss why you are buying the item with the lender and explain how you plan to absorb the cost into your current obligations. Establishing how well you are prepared will give the lender confidence that you have a plan, it is well thought out, and you will be able to make your payments. He or he will have more confidence in your performance and may be more inclined to help you get the best terms.

Identify the Needs of the Lender or Seller

When you have selected the item discuss financing options with the seller. Take the time to establish what your parameters are and what you expect. Ask how sales are going in general. What you want to find out is how motivated they are to sell the item to you. If it is a home and the market is down their motivation could easily be greater than your interest in the house! You want to solicit as much information as you can before discussing the financing options.

Develop Your Power

When purchasing a car or a house the financing is a large part of the cost. Car dealers can make a lot of money of the financing terms. If you have bank financing available, you are able to negotiate a cash price and use your own financing or take the dealer financing if it is better for you. Now that you have the power to choose the dealer loses his control over you and may offer more attractive terms to keep you as a borrower as well as a buyer.

Come Prepared

If you have come to the financing discussion prepared, you will be a unique customer. That gets you respect and perhaps some fear as your being informed erodes the power the seller usually enjoys. Now you have the chance to lead the discussion in the direction you want. You are able to compare the terms being offered with what you know you can get from your bank or personal lender. Unused to this approach, the seller is likely to follow your lead and start trying to match or beat the terms you have available rather than selling you on how great his terms are. The difference is that you have become an equal rather than a pigeon.

Have a Winning Attitude

As always, use your persuasiveness to keep the discussions moving forward toward your goal. Persuasion can include deference, manipulation, bluffing and intimidation among many techniques. The most persuasive argument is one delivered with a winning attitude.


The Economy - What to Do?

Talk about a negotiation! The major forces were at play to stem the current financial crisis. It cried for setting aside our political differences and seeking a cohesive, focused plan to stabilize the situation.

President Bush and Congress had to actually set aside their differences and work together to solve this situation. It required their foregoing power tactics to negotiate in good faith. Or did it?

Paulson's proposed plan was the focus of intense negotiations between the Administration and the Congress and, of course, both Parties. Unfortunately the situation was so desperate that the issues became diverted to add-on riders and special-interest amendments.

It appears that Congress ignored the interests of the American people and protected their pork barrel add-ons. Was this good negotiation? Of course it was. The Congress had the power to hold the Administration up to ransom and did so. BUT, the People of this great Country have seen how they acted and will not soon forget.

Congress may have won the battle but in so doing may have jeopardized their standing in the eyes of America.

Remember, when negotiating you may have several audiences. The misuse of power may win a victory but at what cost?

Fear - the Negotiator's Tool or Nemesis

Fear is what terrorists use against large, organized, powerful foes. In earlier times in Chicago a mafia underling would walk into a local bar or restaurant and observe, "This place could have a fire." The owner would logically say, "No way, never had one." The next day, after a fire broke out in the kitchen, the underling would return and say, "See, I could have helped you avoid that. A little insurance goes a long way."

This intimidation forced many law abiding citizens to pay for protection from the Mafia.

In the 21st Century Muslim extremists are using the same concept. They are trying to invoke fear into the western population to advance their cause. They cannot hope to confront most of the world's military power or even their own countries head on, so they resort to attacking the mass population in the name of Allah and their cause. If the masses become too fearful they will either promote aggressive retaliation or elect acquiescence candidates to avoid personal harm. Either way, the terrorist gains strength and power by usurping control of the population.

The best defense against a terrorist is to not change dramatically our daily routine, our perspective on life, and our willingness to do what we want to do. Add to this a little caution, some extra vigilance in being aware of what is going on around us, and not changing our basic beliefs will declaw the attempt of the terrorists to control us.

In a negotiation fear plays a large, strategic role in the outcome. Fear of failing, fear of the unknown, fear of not being helpful, there are many fears that can be used to advance a negotiator's cause. One of the most powerful tactics that few think to use is the fear of not being helpful.

Everyone wants to think that they care about others and want to be liked. A professional and adept negotiator will take the time to build a strong relationship with his or her adversary before really getting to the task at hand. In today's fast paced world, too little time is spent in this fashion. As a result, many negotiating successes are lost because people are too impatient, to hurried and dismissive of the value of building relationships.

How does fear serve the negotiator in this context? By becoming a silent motivator to get the other person to do something that he or she does not want to do. A sociopath has no regard for the feelings of others. He does not relate to others. The rest of us do. In the business environment, many try to be non-emotional. They get away with this sociopathic approach if the other person does not build a personal "bridge". Bank lending officers, credit managers, retail clerks all fit this mold. But who gets the best service at a store? Not the dour patron but the person who reaches out with a smile or kind remark. That is the person the clerk relates to and gives just a little extra. Why? Not because they have to but because they want to. This is a basic demonstration of the application of fear in a negotiation. The customer who has made the effort to build a personal bridge to the clerk has subliminally made that person concerned that they do not want to offend the person in some way. So they try to accommodate the patron.

Debt Restructuring Before Buying a New Home

The most important aspect of personal debt restructuring is to ask before you get in too deep and before they start chasing you to pay.

Nell Henderson, Washington Post Staff Writer, Tuesday, September 27, 2005 wrote an article, "Concerns Raised as Home Sales, Prices Rise Again". In the article he notes concerns about the high cost of real estate and the risk lenders are taking by granting creative financing to facilitate sales at such elevated prices. "One driver behind price appreciation, Greenspan said, is the popularity of new types of mortgages that enable many borrowers to buy houses at prices they could otherwise not afford -- and that may be hard for some borrowers to repay if interest rates rise and home prices stabilize or fall."

The temptation of getting into the runaway housing market is understandable. Simple savings accounts are returning less than 2% per year. CDs and bonds are not much better. "Safe" funds are yielding 5% pre-tax. And real estate is surging, offering both equity appreciation and tax protection. However, if you are in debt, it's important to make sure you restructure it and consolidate it before taking the leap into the housing market.

So many see the risk of taking on a house that is beyond their means as worth taking in order to create value and build a financially secure future. The problem is that the lenders, once predominantly banks prone to conservative lending standards, now include pension funds, insurance companies and other investment entities eager to place loans to keep their money working. It is not the lenders who will be hurt. It is the borrower who gets burned. Bankruptcy laws are changing in October and it will no longer be convenient to file bankruptcy to avoid creditors. Individuals, once protected from forced liquidations, will find that to be the norm rather than the exception. So it is more important than ever to learn how to renegotiate or restructure debt before one is forced into bankruptcy court.

Renegotiating debt is best done before you are too delinquent. couple-agreeing-with-man-sm.jpgWith a solid payment history with your lenders you are more likely to find them willing to work with you when you approach them. Debt can be restructured a number of ways but there are some cardinal rules to observe so that you preserve your ability to control the restructuring of your debt.

-Do not wait until the debt has been turned over to a collection agency. By then it is too late to deal with the original issuers of the debt who might have an interest in helping you. They have discounted and sold off your debt when it is turned over to collections. That means they have written off what they would have conceded to you to a third party. The third party's only motivation is to make money off your bad situation.

-Before you seek debt relief, develop a personal budget that is viable and a plan which you can handle. Now you are ready to lift the telephone and call for help.

-Don't be afraid to ask for help. Advising the lender of a looming problem allows them to help you avoid it becoming a major issue.

-Be persistent. "No" is easy for creditors to say. You will hear it a lot. Call back and try to get to someone else. Talk to the same person repeatedly until they begin to get to know you and start wanting to help you.

-Be pleasant. You need to develop a rapport with the other person so they want to help you. Getting mad often makes things worse.
Debt restructuring is a basic form of negotiation. You have a need.

The lender also has a need. You have a solution to offer. They have to be convinced to listen to you. You have to convince them of your sincerity and why they should gamble with your plan. Don't ask for a hand out. Ask for approval of a specific plan.

A plan that works for you should give them something as well. The two primary commodities are time, money and your credit rating.

-If you have money, but not enough, explain your situation and offer to pay off the debt at a discount. If they sell off your debt they will be lucky to get 50 cents on the dollar. Obviously you should be able to settle between 50% and 100%.

-If you offer to pay the full amount, but over time, you will be saving a lot in money and keep you credit rating from being impacted.

-Be sure to negotiate the interest. It does you no good to extend your payment period if you are also going to be paying a higher interest rate. Interest rates are negotiable.

-Finally, require that the lender not place this delinquency or restructuring of the loan on your credit report.

The most important aspect of personal debt restructuring is to ask before you get in too deep and before they start chasing you to pay. A good customer's case always sounds better than a plea from a habitual problem customer.

By successfully restructuring your debt you will have protected your credit rating for forays into the housing market.


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Credit Card Debt Negotiation

There are big changes in the bankruptcy law coming in October 2005 according to Attorney Albin Renauer. He suggests if you're thinking of filing for bankruptcy, do it now. It will be much harder to qualify after October 17th. The credit card industry has finally gotten the bankruptcy law "reform" changes they've been lobbying for. Signed into law on April 20, 2005, the new law will take effect on October 17, 2005. It has significant impact on consumer debt and offers fewer protections from collection efforts than the prior law.

America is swimming in debt. Credit card debt, mortgage debt, car loans, variable mortgages, lines of credit, consumer debt, business leveraging, corporate debt, and state and federal debt. It all adds up to the fact that we are living beyond our means. When there is a disruption in our income, that debt which was once a means of living the good life becomes the albatross that threatens the ship. Love it or hate it, we seem to be a society that has to have it.

Debt can be restructured a number of ways but there are some cardinal rules to observe so that you preserve your ability to control the restructuring of your debt.

1. Never wait until the debt has been turned over to a collection agency. By then it is too late to deal with the original issuers of the debt who might have an interest in helping you. They have discounted and sold off your debt when it is turned over to collections. That means they have written off what they would have conceded to you to a third party. The third party's only motivation is to make money off your bad situation. You are now truly dealing with the devil!

2. Before you seek debt relief, develop a personal budget that is viable and a plan which you can handle. Now you are ready to lift the telephone and call for help.

3. Don't be afraid to ask for help. Advising the lender of a looming problem allows them to help you avoid it becoming a major issue. Trying to avoid the lender only puts you on the defensive with nowhere to go.

4. Seek to be transferred as high in the organization as you can. You want to be at a level where the person is allowed to think and has the authority to grant you a concession or revised payment schedule.

5. Be persistent. No is easy to say. You will hear it a lot. Call back and try to get to someone else. Talk to the same person repeatedly until they begin to get to know you and start wanting to help you.

6. Be pleasant. You need to develop a rapport with the other person so they want to help you. Getting mad only seals your fate.

Credit card debt restructuring is basic negotiations. You have a need. You have a solution to offer. The lender also has a need. They have to be convinced to listen to you. You have to convince them of your sincerity and why they should consider your plan. Don't ask for a handout. Ask for approval of a specific plan. A plan that works for you and gives them something they can accept. The two primary commodities are time and money. If you have money, but not enough, explain your situation and offer to pay off the debt at a discount. 30% to 40% is not an unusual discount. If they sell off your debt they will be lucky to get 50 cents on the dollar. If you offer to pay the full amount, but over time, interest free, you will be saving a lot in money and keep you credit rating from being impacted.

The most important aspect of personal credit card debt restructuring is to ask before you get in too deep. And ask before they start chasing you to pay. A good customer's case always sounds better than a plea from a habitual problem customer.