Debt Negotiation
If you call the credit card companies and loan officers, you can often reduce the interest rates. The reduced interest rate will make it much easier and faster to pay down the loans. The companies will often do it because they do not want to lose your business. They think that if they lower the rate for you, that you will stick with them a little longer.
Typically, to lower the principle amount, you need to be late. When you are close to being turned over to a collections company, the company is faced with losing the account. If they turn the account over to collections, the collection company will normally charge at least 20% right off the top. And, the company that you were late with, will not get paid at all unless you pay the collection company.
At this point, companies will often be willing to negotiate. You might be able to get about 50% reduction in the principle amount owed. The key is to try and negotiate so that the company your are defaulting with feels they are better off settling than to lose even more sending you to collections.
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