Paying off debt is one way to get your credit back on track. Another way? Negotiating with your creditors to get them to lower the amount of money you owe them. It sounds great, and it is possible, but creditors and their money aren’t easily parted. Read on to learn how to negotiate with your creditors to get them to lower your debt.

Drop the B-word: Bankruptcy

Whether or not you’re seriously considering bankruptcy, it’s a very real threat to creditors. If you go bankrupt, they get nothing. It’s financially advantageous to them if you don’t go bankrupt and instead agree to pay them a percentage of what you owe. Hinting at this right off the bat is a good way to get their wheels spinning about negotiation.

Shoot for Less than 50%

They won’t start there, but they may end there. Unsecured creditors (like credit cards) will often settle for around 30-50% of what you owe. You’ll have to put in a bit of work to get to that point, though, so it’s a good idea to start with an even lower offer, like 15-20% and work up from there.

Be Able to Make Payments Quickly

If you have cash on hand and can offer to transfer money right away upon reaching an agreement, you’re more likely to get a creditor to agree to your deal. Creditors want cash–plain and simple. If you can offer them a lucrative amount of cash in one lump sum, they may be more willing to accept your offer than if they have to wait for several small payments over many months.

Have an End Goal in Mind

Before you even begin negotiating, you should have a clear idea of how much you can realistically afford to pay, and make this your goal. If you can, your goal should be to eliminate your debt altogether. After all, what is the point of negotiating if, in the end, you’re still left with a debt you cannot afford to pay off?

Mortgage Creditors

Stuck with a mortgage payment you can’t afford? You may be able to lower your monthly payment by using a home loan modification program, like HAMP. However, negotiating with large corporate mortgage lenders is usually very difficult. Oftentimes, they’ll advise you to intentionally fall behind on your monthly payments in order to make a case for a modification. This can be a trap of sorts, though, because while you wait for your modification to go through, the late fees and penalties rack up, which could result in an unintended foreclosure.

You have a much better change of negotiating a mortgage held by a small, local lendor. If you can find a way to get a face-to-face meeting with someone to make your case, your chances of getting a modification will be greatly increased.

Secured Loans: Cars, Boats, Motorcycles, etc.

Just like with a mortgage negotiation, you’ll have a much better shot if the loan is with a small bank than a national one. Otherwise, use the same strategies we discussed for negotiating your credit card debt: drop the word bankruptcy, be able to make a quick lump payment, and keep your end goal in mind.

Student Loans

Bad news: student loan debt is almost never dischargeable through bankruptcy. However, there are programs out there developed to help people who are drowning in student loan debt. Research government programs that can help you lower your monthly payment or even get the loans wiped out altogether.

Local Business Debts

If you have an unpaid doctor, dentist or mechanic bill, or anything similar, you can negotiate using the same strategies listed above. Again, aim for a face-to-face meeting with the person directly responsible for making decisions about the company’s finances.

Credit Union Loans

Though credit unions are a great resource for securing loans, they’re often more difficult to negotiate with than bigger banks because they don’t have as much freedom to move around money, so to speak. You may be able to secure a slightly lower debt, but may have a hard time getting the amount below 50% of what you owe.