By the time you finish reading this article, you will have a better understanding on how to settle a debt. When entering the settlement game, there are techniques that you should not use when you first start negotiations. For starters, don't appear to look desperate for a settlement because the creditor may use it against you.  For example, don't say, "I need to clear this debt, so that I can buy a house or a car." Here are a few examples of opening negotiation tactics you might want to consider:

Settle debt - Negotiation tactics

• I don't have the amount you are looking for, but I can settle for this amount today.
• I'm actually considering filing for bankruptcy since I don't have the amount you are asking for. Is there something we can work out?
• My financial situation is getting worse, but if I can come up with a lump sum would you settle for this amount by tomorrow?

Settle debt - How much should I offer?

Before making an offer, set the amount you will start with and the highest percentage you will settle for.  For example, you can start at 20%, but your max will be 35%. Banks start high like 80%, and the lowest they will go is 30%. Always try to get the lender to meet you in the middle as this can be done during the counter offer stage. You can start with 20 cents on the dollar and move up to your max negotiation price. Use dollar amounts when speaking rather than simply saying "20 cents on the dollar." The dollar amount is a concrete term that can be more easily grasped and referenced back to. If you can't make the lump sum, negotiate a partial payment now and three payments over the next three months.

Settle debt - What if the creditors want to settle?

• You can wait a week and call them back asking to speak with the supervisor and offer the same settlement.
• Repeat the process every week moving up the management chain until you reach the president.
• Send a letter stating that you need a response right away because the other creditors have accepted your agreement, and you will have to start the plan without them.
• Wait until the creditor sends you another balance due letter. You can counter with a settlement letter.
• Retain a bankruptcy lawyer and have him send the creditor a letter stating you are considering bankruptcy.
• Hang up and call again to get another representative.
• You could pay the original balance without the fees. If the original balance is taken care of, the creditor or the collection agency can't report only the interest and fees to the credit bureau.

Concluding, when you are dealing with creditors and collectors during a settlement stage, cash, technique, and skills will determine the winner. If you have all three, then by far you will come out on top. Now that you have the knowledge to settle a debt, go out there and make it happen.