The art of debt negotiation: how to talk to creditors to get your finances back on track
Learn exactly what to say to your creditors, understand your rights, and discover how MyBudget can help you pay off debt, reduce interest and set financial goals you can actually achieve.
How to negotiate with creditors to reduce your debt
If you’re behind on car loan payments or struggling to pay your bills on time, this guide will help you find the confidence to start negotiating with your creditors before things spiral out of control. Don’t panic, and don’t ignore the problem. Talking to creditors sooner, rather than later is key to getting back on your feet financially.
Did you know?
ASIC Moneysmart
Under Australian law, lenders are legally required to consider hardship requests? Whether it’s a credit card provider, utility company, or bank, being proactive and prepared can make all the difference.
In this guide, we’ll walk you through everything, from budgeting 101, knowing your rights, what to say to your creditors, when to ask for professional help, and how MyBudget can give you the tools and support to get your finances back on track for long term financial stability.
Step 1: Prepare before you negotiate with creditors
Before you call your creditors, get a clear view of your finances. If you don’t have a budget yet, don’t sweat it. MyBudget has a free Personal Budget Template so you can set up a budget and know exactly what you can afford to repay once you begin negotiating with your creditors.
Get organised:
- Gather recent credit card statements, bills, and payslips
- Calculate your income, expenses, and debts
- Identify which bill payments are overdue and which creditors to contact first.
Explore our free budgeting tools and resources designed to help you save smarter, plan ahead and achieve lasting financial success.
Step 2: Contact creditors early to reduce debt faster
Reaching out to creditors early can protect your credit rating, avoid late fees, and prevent your debt from being passed to debt collectors.
According to a 2024 ASIC Hardship Report, 40% of Australians who reach out for financial help, fall back into arrears. Many others don’t reach out for help due to barriers like anxiety or stress or they don’t know that hardship assistance programs exist.
This highlights that simply asking for help isn’t enough, you need the right debt solution plan for your unique financial situation and ongoing support to get back on track financially for the long term.
That’s where MyBudget’s expert Money Coaches can help. We can contact your creditors on your behalf, negotiate reduced interest rates to reduce your overall debt over time, set up affordable repayment plans, and even develop a debt management plan tailored to your financial situation.
Step 3: What to say when negotiating with creditors
Creditors value honesty and clarity, they simply want to know that you’re committed to finding a realistic way to repay your debt. Showing that you’ve done your homework and are serious about getting back on track financially builds trust and increases your chances of reaching a positive outcome. Before you pick up the phone, know exactly what you can afford, (hello, MyBudget’s free Personal Budget Template) have your numbers ready, and remember: you’re not asking for a favour, you’re working towards a solution.
Here are some debt negotiation scripts for when you are ready to start the conversation:
- Ask for a payment plan: “I’m experiencing financial hardship and would like to set up a reduced payment arrangement.”
- Request a lower interest rate: “Could you temporarily reduce my interest rate to help me manage repayments?”
- Ask for waived fees: “I missed a payment due to financial stress. Can you please waive the late fee while I get back on track with my finances?”
- Propose a lump-sum settlement: “If I can pay a portion of the balance now, would you consider that as a full settlement?”
Always get agreements in writing and keep records of all correspondence. If your creditor refuses your request, consider escalating through an external dispute resolution scheme like AFCA (Australian Financial Complaints Authority).
Pro tip: MyBudget’s Debt Arrangement Team can handle these discussions for you, saving time, stress, and uncertainty. Get in touch with one of our team members today for a free, no obligation chat.
Did you know?
Most of MyBudget’s clients pay off 90% of their unsecured debt in just over three years.
Step 4: When to get professional help if you can’t pay your bills
If you’ve tried negotiating with creditors and still can’t keep up with your bills, MyBudget is here to help you get back on track. We can help you explore a range of debt relief solutions including:
Debt agreements
Tailored, legally binding solutions like Part IX Debt Agreement or Part X Debt Agreements to help you regain control of unmanageable debt and work towards becoming debt free.
Creditor negotiation
Expert support to negotiate directly with creditors for reduced repayments, waived interest or more flexible payment arrangements.
Debt consolidation
Combine multiple existing debts into one new loan with MyBudget Loans to simplify your finances, reduce stress and keep track of your payments.
Credit card debt help
Strategies to reduce high-interest credit card debt, manage repayments and restore your credit score over time.
Budgeting support
Tailored budgeting plans that align with your income and lifestyle, helping you save and stay on track toward long-term financial goals.
Mortgage refinancing
Expert guidance on refinancing your mortgage to reduce financial pressure, avoid arrears and stay on top of regular payments. Find out if you are in Mortgage Stress with our Mortgage Stress Calculator.
Personal loans
Help restructuring or managing your loan repayments to better suit your household budget. Check out our Personal Loan Calculator now.
Bankruptcy guidance
When no other option fits, MyBudget’s team provides clear and dedicated support through the bankruptcy process so you can rebuild your financial future with confidence.
You can also contact the National Debt Helpline for free general advice. If you’re looking for tailored, ongoing support to reduce debt and rebuild your finances, MyBudget offers all of the above solutions and one-on-one guidance to help you stay on track long term.
Step 5: What if creditor negotiations fail?
If creditor negotiations don’t go as planned, you still have options:
- Lodge a complaint with the creditor
- If your dispute remains unresolved, escalate to AFCA or another external dispute resolution scheme
- Seek legal advice or assistance from a financial counsellor or MyBudget.
If your debts lead to bankruptcy proceedings, you’ll still have protections under the Bankruptcy Act 1966. MyBudget can guide you through every step to safeguard your property, assets, and financial stability.
MyBudget debt solutions: How Megan and Creagh paid off $91,000 in debt
Megan and Creagh were $91,000 in credit card debt. Everyday overspending, combined with multiple interest-free balance transfers, left them stuck with high-interest balances and no clear plan to get out of debt.
- A tailored debt repayment plan to help them pay off debt faster and map out their income and expenses for 12 months
- Automated payments to cover all bills and debts on time
- Extra repayment strategies to minimise interest and show them how to budget better.
In just 10 months they:
- Paid off $60,000 and cleared five credit cards
- Reduced money stress with the right help and support
- Stayed on track to reach their goals.
Now, Megan and Creagh have proven that with the right support you can pay off debt faster, budget better, and still enjoy life, all while working towards big goals like a house deposit.
Watch Megan and Creagh’s full financial comeback story here: How we got out of almost 100k debt.
Let MyBudget help you negotiate with creditors and get back on track
Negotiating with creditors isn’t just about paying less, it’s about regaining financial control and building a plan that protects your future. Whether you’re dealing with credit card debt, personal loans, mortgage stress or you are juggling multiple overdue bills, MyBudget can help you find a sustainable debt solution.
Enquire online or give us a call on 1300 300 922 to book your free appointment today.
Debt Solutions FAQs
What debt solutions do MyBudget offer?
For those needing help with debt relief, we can speak with your creditors, negotiate payments and develop a tailored debt repayment strategy. This may include debt consolidation, mortgage refinancing, a Part IX Debt Agreement, bankruptcy or affordably paying your way out of debt with a realistic, tailored personal budget.
What is the difference between a Debt Arrangement and a Debt Agreement?
A Debt Arrangement is an informal, flexible repayment plan negotiated between you and your creditors (sometimes with the help of a service like MyDebt Solutions). It’s not legally binding, which means it’s easier to adjust if your situation changes.
A Debt Agreement, on the other hand, is a formal and legally binding arrangement under Part IX of the Bankruptcy Act 1966, regulated by AFSA. It provides stronger legal protection for you and your assets but follows strict eligibility and compliance rules.
In simple terms: a debt arrangement is more casual and adaptable, while a debt agreement offers a legally recognised pathway to manage serious debt under official regulation.
Will debt collectors still call me?
MyBudget’s expert team can communicate directly with your creditors on your behalf. Many of our clients tell us they feel instant relief once we step in to handle the calls, knowing someone experienced is managing those tough conversations for them.
What is debt consolidation?
Debt consolidation combines multiple existing debts into a single new loan. The aim is to reduce your repayments by paying out your existing debts and rolling their balances into a single, larger loan with an interest rate and repayment that is lower than the sum of the previous, separate loans.
How much does MyBudget cost?
Costs vary depending on your circumstances and the level of support you need. Your first appointment is free and you will receive a tailed 12-month personalised budget plan.
How do I get started with MyBudget?
Getting started is simple. Contact us for a free, no-obligation chat with one of our Money Coaches. We’ll help you create a clear plan to pay off debt, grow savings, and achieve your financial goals.
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