Contacting the creditor and negotiating your debts with him are the two key factors for the success of debt settlement. In the initial stages while contacting your creditors one must straightway focus on a few things like:

• Which creditor to contact.
• How to contact the particular creditor.
• The type of condition you show should be such that the creditor would appreciate.
• The amount you should offer.
• The mode of payment.

In most cases you have to contact the original creditor if your account is not sent over for collections. In few cases your account is sent over to a collection agency. To find out whether the account is in the hands of the collection agency consult your credit report. This is a very important document and reflects your debt status in detail. If your account is not in collections, then you must contact your original creditor for sure. The method to originate contact varies with the situation and the person you are trying to contact.

Ways to contact a Collection Agency

Make sure that you never contact a collection agency by phone. Collection agents in most of the cases want to collect money and have no interest to settle your debts over the phone. They are usually very rude and you have a chance to be abused verbally. Though this may be illegal, it is extremely common. During the verbal discussion if you loose your temper and say something wrong to the collection agent, it may put a set back to all your chances of a proper debt settlement in the future. Thus, letters are the best way to communicate with a collection agency. At times the collection agencies might refuse to accept letters from the debtors, suspecting that you are better placed legally. But there is a trick you have to play in such situations. Enclose the words "Payment enclosed" on the envelope when you post the letters. Now they will surely accept the letter and open the mail. If you know the fax number of the collection agency, fax them immediately and remember to keep the 'delivery of the fax receipt'. This could serve as a very important document in the future.

Ways to contact your Original Creditor

It is ideal to contact your original creditor via phone. If the phone number of the creditor is missing take the help of the toll free information directory at 1 800 555 1212. The customer care representatives usually take down notes of what you say so it is better to be precise and straight forward while you speak. Make sure you do not speak harshly and create a bad impression. Firstly find out from the rep the status of your account as to whether it is given over to the collection agency or is with the original creditor. If you find the rep interested in the offer which also suits you, tell him you will do the follow up with a letter and a fax and enquire where the paperwork needs to be sent. In all probability you will get a better deal than what he quoted. So, never pay them at this point even if they persuade you to do so. Tell them very firmly that you need a written document for any transaction that is held between both of you. If you are not satisfied with the offer of settlement thank them, and ask for the mail and fax information. Lastly if they don't make you any offers don't lose heart ,just remember to take all the details related to the correspondence . However, under all circumstances it is most vital to ask for the mailing address, fax number, the first and last name of the rep and his direct telephone number.

What if the creditor contacts you first?

At times a creditor may communicate with you first via phone or letter. Don't be surprised ,but be sure you will get a better deal in such cases, compared to the one offered to you earlier. In this case too make sure to get the rep's name, direct phone number and company address. If you are consistently contacted by the creditor company with better offers , it is time for you to take the best decision. Go by the basic rules which say, that most creditors do not go below 30%-50% of the original balance. So if the offer approaches this figure it is time for you to accept that offer. If you accept the offer, you should have a transaction with written letters like "Acceptance of Written Offer" and "Agreement to Settle a Debt".