If you are having trouble paying your bills every month, you are going to have to do something. After you realize that you have no other options, you will have to talk with your debtors. This isn't that difficult a task, as long as you know where you stand financially and what you can do.

You need to sit down and determine how much you can pay to settle the debt in full. You may be able to pay the debt off in full, in part or make payments. You need to know what your limits are and what you can do. You should also know your rights. There are statutes of limitations on debt, know your rights.

You have something that the debt collector or debtor is looking for -- money. You are in a position of power here. You can ask for anything. And if you are reasonable, you will find that many debtors will work with you to get your debts paid off.

If the person you are talking with says they are unable to accept anything less than the full amount, you need to ask to speak with a supervisor. Most advisors recommend offering less than you are willing to pay, so that you are able to negotiate. However, you are morally obligated to pay your debts. I always advise to pay as much as possible. After all, you owe it. Be upfront and don't play games. Be honest about what you can pay.

Don't get upset or lose your temper. Many debt collectors will try to make you mad so that you pay up just to get rid of the stress. Don't offer information and don't explain your situation. Just keep it simple. Tell the debtor what you can do and what you can't do. Be firm and persistant.

Remember, you are the one with time on your side if you are negotiating an old debt. The debt collector will want this debt settled as soon as possible. This is due to statutes of limitations regarding debt collection.

You will want to make sure that all negotiations are also in writing to avoid any misunderstandings. It is also important to have a paper trail of what is offered and what is agreed to. Make sure you follow up eaver phone call with a letter confirming the substance of the conversation.

Make sure you cover how the payment is to be made, when it is due, where it will be sent, that the payment does not constitute admission of liability and that the agreed settlement is in full satisfaction of the debt. Make sure that you request that the debt is fully removed from your credit report. If the collector will not delete it, request that it be reported simply as "paid". You don't want to see "paid-charge-off" or "paid collection" on the debt, simply that it is "paid."