Should I Try to Negotiate My Debt With My Own Creditor?


Dear Steve,

I incurred a credit card debt of about $9,000, and I stopped making payments on this card.

I signed up with a large debt consolidation company and made monthly payments of $250 toward my escrow account. My credit keeps getting hit every month because the debt consolidation company and the credit card company have not agreed.

Should I try to negotiate with this credit card company, one of the largest companies nationwide?

Another credit card firm offered to reduce the principal by about 20 percent and agreed to a much lower interest rate about 6 months ago, and I am current with that card.

I can give you the name of the credit card company that has not taken the debt consolidation company’s offer if you wish.

Your help will be greatly appreciated.

I got into financial trouble because I trusted a “Friend” who defrauded me.

Thank you.

Best regards,



Dear Urman,

We need to put all the players into context first.

It sounds as if you have enrolled with a debt settlement company. Both the company you signed up with and the other one that you call a credit card firm appears to actually be debt relief companies attempting to sell you some sort of product.

A debt relief company has three primary ways to operate. They can put their needs first, attempt to blend their goals and your goals, or place your needs first.

For example, it seems another debt relief company claimed they could get you a better settlement offer on an account you are current on. But the truth is that they can’t make any promises or tell the creditor what to do. They can tell you what has been achieved in the past, but ultimately only your creditor can determine what terms they want to offer.

Even if a debt relief company makes claims like that when you read the client agreement, most companies ask customers to sign; it will say they don’t guarantee any claims they made about settling a debt. So the claim becomes more marketing than fact at that point.

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Sadly, many debt relief companies do what is best for them and generate the most revenue for their business. I completely understand why that happens, but it can put the consumer at a disadvantage.

However, some people like debt coach Damon Day that provide debt advice attempt to always put the consumer first.

From a consumer in debt position, it is nearly impossible to tell who has your best interests at heart. There is no substitute for good competent advice, so as a debtor, you are left needing advice but not knowing who to trust.

Since I don’t know the name of the company you signed up with, I have no possible way to have any opinion on how they advised you to handle your debt.

It seems like a simple question about if you “should” attempt to negotiate with your credit card company. What complicates the situation is that while you can absolutely always communicate with your creditors, you don’t know what they will or won’t do, and so you have no idea if you are getting a good or bad settlement offer.

Ironically, many consumers that default will receive an excellent settlement offer directly from the credit card company if they wait long enough and mentally battle the collection efforts until their delinquent account winds up in the right department.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

There is no requirement that any credit card company has to accept any claim from any debt relief entity other than the bankruptcy court when a debtor files for bankruptcy protection.

So where does this all leave you?

The honest answer is it leaves you floundering. You have one debt enrolled with one debt relief company and a second debt you are thinking about enrolling with another debt relief company. On top of that, your creditor has not agreed to the settlement offer, but they don’t have to. The delinquent debt continues to hurt your credit score and can wind up in litigation with your credit card company suing you.

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The logical path at this point would be for you to speak with someone and get a second opinion about your overall situation and not debt-by-debt.

I would suggest you talk to a credit counseling group, Michael Bovee, Damon Day, or find a good local bankruptcy attorney and have a free discussion about what bankruptcy would mean for you. Bankruptcy is the fastest way to get a fresh start for the least amount of money.

Please come back and post an update in the comments below about what you decide to do.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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