Debt Negotiation

Debt negotiation (also called debt settlement) is the negotiation of discounted settlements with your creditors where you pay off the loan for less than the full amount due.

Debt negotiation can be a great strategy, but does not fit the needs of everyone. After essential family expenses, do you have enough income to pay your bills each month? If not, you have a hardship that may qualify you for a discounted settlement of a debt.

Debt negotiation is not a “free lunch” for people who don’t feel like paying their bills. But, if you are in over your head - and you would prefer to work things out with your creditors instead of filing bankruptcy - debt negotiation is an honest and ethical strategy.


Debt Negotiation FAQs

Click on a question to view the answer.

What is debt negotiation?

  • Debt negotiation (also called debt settlement) is the negotiation of discounted settlements with your creditors where you pay off the loan for less than the full amount due.

Is debt negotiation right for me?

  • Debt negotiation can be a great strategy but does not fit the needs of everyone. After essential family expenses, do you have enough income to pay your bills each month? If not, you have a hardship. The better job we do of explaining your hardship to the creditors the better debt negotiation will work.
  • Debt negotiation is not a “free lunch” for people who don’t feel like paying their bills. But, if you are in over your head - and you would prefer to work things out with your creditors instead of filing bankruptcy - debt negotiation is an honest and ethical strategy.

How does debt negotiation work?

  • Financial Samaritan gathers information from you about your debts, finances and your family and their needs. We analyze this information and present it to creditors in a way they will understand your hardship. The better they understand what you are struggling with, the faster they respond and the more likely you will get a satisfactory answer.
  • Sometimes creditors will respond with a counter-proposal. We present their proposal to you and you decide what you want to do. If you reject the proposal, we will gather more information and repeat the process until you and the creditor reach a final agreement. If you accept the proposal, then you will make the payment(s) to the creditor as you have agreed.
  • You are always in control of the final decision and you are always in control of your money.

Is it possible to borrow the money to pay a discounted settlement amount to a creditor?

  • Yes. There are lenders who will make a consolidation loan for the amount of the discounted settlements. If you would like Financial Samaritan to help you find a consolidation lender, click here.

How much discount can I expect?

  • There is no single answer to this question. Every person’s situation is different. Our goal is to clearly explain your hardship. The more information you provide us, the better we can do. Depending on your individual financial situation and the number of past due payments, the discount may be a little or a lot. On average, we see discounts of slightly over 50% of the principal balance.
  • Remember, you always control the final decision to accept or reject any offer.

What type of debts can you negotiate?

  • The most common negotiations relate to credit card debts, medical debts, student loans, signature loans, judgments, and other unsecured debt. We can also negotiate mortgage loans and auto loans; although they are more complex and require more time and information to build a persuasive information package for the creditor.