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For some people, debt negotiation is a better option than filing for bankruptcy. By negotiating the terms of her debt with her lenders, a debtor can potentially reduce her total debt and halt collection calls. Even though creditors have some incentive to negotiate the terms of debt, it would be a mistake for someone to go into these negotiations without performing prior research.

Sometimes, creditors will try to convince a debtor that certain unsecured debts are actually secured, meaning that the creditor has the ability to take back an asset like a car or house. A debtor who goes into negotiations already knowing which assets are secured and unsecured won’t believe these tactics. A debtor can also increase her negotiating power by understanding creditor weaknesses. For example, creditors are limited by the practices outlined in the Fair Debt Collection Practices Act.