Negotiation

The basic principle of negotiation is very simple: you can only go down, never up.

The only time you have a chance of negotiating upwards is when your debtors tell you what they can afford - at which point you have a chance of being able to reach a more satisfactory outcome by negotiating up and reaching a compromise figure. When you begin negotiating for settlement at any other time, though, you should bear in mind that you might have to settle for a reduced figure, and begin by asking for the whole of the outstanding amount, plus accrued interest and the statutory collection fee - and be quite clear in your own mind as to the minimum figure you are prepared to accept.

Applying for interest and collection fees from the outset is a very advantageous collection tactic to use because it allows you to negotiate downward from a position of strength. If, for example, the account has been outstanding for a long time, accrued interest might amount to a considerable sum. Your first concession would therefore be to agree to waive a portion of it, which would reduce the outstanding balance without your having to write anything off.