If you’re suffering from health problems like headaches, an ulcer, high blood pressure, heart disease or obesity it may be due to your debts. You might not have ever thought of it this way but the stress you’re feeling from trying to handle your debts could be making you sick or causing other physical problems.

There are ways to get debt under control and eventually paid off but make no mistake about this. The only quick and easy way to get rid of debts is through bankruptcy. But there’s a lot of brain damage associated with a bankruptcy, plus the fact that it would ruin your credit for years to come.

However, there is some good news. You could negotiate with your creditors and get your debts under control and ultimately paid off – though it would probably take anywhere from 5 to 8 months.

So how do you do debt negotiation?

Determine your goals

Before you contact any of your lenders it’s important to define your goals. It could be to get the interest rate on some or all of your debts reduced, to get a timeout of a few months during which you wouldn’t make any payments, to pay less each month, to get your balance reduced or to the settle the debt.

Before you call

The next step in successful debt negotiation is to have all of your information ready before you make any calls. This should include the minimum monthly payment, and the interest rate on the debt and how much you have left to pay on it. You will also need to list your assets and their value. You should also note if you’re current or behind on any payments. If you are behind, make sure that you record the number of months you are past due and the total amount that’s past due. Divide your debts into two columns – secured and unsecured. Your unsecured debts should be ordered by their interest rate with the one with the highest at the very top. Make sure you leave space next to each debt so you can record what you are able to negotiate with the lender.

Review your budget or make one

If you don’t have a budget you need to develop one. This will help you determine just what you need from each of your lenders in order to get your debts under control and paid off. In some cases you may want to negotiate to have the amount of your monthly payments reduced on a temporary basis. Or you might want to have your interest rates reduced or to make interest-only payments for a few months. In extreme cases you might want to try negotiating to settle the debt or debts for less than you actually owe by offering a lump sum payment.

Once you’ve done all of this work and are ready to begin, you can start contacting your creditors. In most cases you will contact your lender by phone. This is especially true in the case of credit cards such as a MasterCard or Visa where you should start by calling the company’s customer service number. If your goal is to negotiate on your mortgage or auto loan, your best bet may be to talk with the lender in person.

Get everything in writing

Whether you choose to negotiate via telephone or in person you need to keep a meticulous record of the person with whom you spoke, the date of the conversation, what you asked for, how the lender responded and information about any agreement you are able to reach. And maybe this goes without saying but we will say it. You should carefully file away all correspondence related to your negotiations whether it’s letters you sent or received.

On first contact you need to explain why you are having financial problems and give a general explanation of why these problems occurred. For example, it could be due to the fact you lost your job, you have a sick child and have been saddled with a lot of huge medical expenses, your ex-spouse is not paying you the child support you’re supposed to be receiving or you simply took on too much credit card debt.

You need to show the lender what you are doing or have already done to improve your financial circumstances and to minimize the chances that you’ll have new money problems in the future. As an example of this you might say that you’re living on a very tight budget, you’ve been getting help from a consumer credit service, you have taken on a second job or your spouse or partner has taken a second job. In other words, you need to have a good explanation of both why you’re in financial trouble and proof that you’re trying to deal with it.

The first person may not be able to help

Banks and credit card companies tend to be huge bureaucratic institutions with many different divisions and departments. In addition, the people that have the power to work with you tend to have different titles. The first person you contact in customer service may not be able to help you. You need to determine this upfront so that you won’t end up wasting a lot of time. In most cases, if the customer service representative can’t help you, he or she will transfer you to a different department. Be sure to get the phone number of that department in the event that the call is dropped or you need to contact it again in the future. Also, be prepared for the fact that some companies simply will not negotiate directly with you. They may insist that you use a consumer credit counseling service – assuming you’re not already working with one.

Making it official

If you are able to successfully reach an agreement make sure you get everything in writing. If your lender refuses to write up the agreement, do it yourself, sign and date it and then send a copy to the creditor. The document should include all applicable interest rates, all deadlines, and the amount of any fees you have agreed to pay and under what circumstances you will need to pay each one. Of course, it should include everything the creditor has agreed to do or not do. It should also include information as to when you and the creditor will be considered in default of the agreement and what would be the consequences of the default.

When there’s a problem

If a problem develops down the line after your agreement is official and you don’t have everything in writing, it may be very hard to resolve your differences. Both you and the lender may have different memories of what you agreed to. When this happens you may have to hire an attorney to help you work out or arbitrate the problem. If the disagreement is really severe and your attorney is not able to resolve the problem, you may end up in court where a judge will then decide your fate.

Don’t sign an agreement with any creditor that involves a lot of money or an asset that you don’t want to lose, without getting a consumer law attorney to review the agreement. This is to ensure that you are protected and that the agreement can’t potentially create problems for you in the future. Of course, don’t hire an attorney until you find out how much he or she will charge to do the review. This shouldn’t take more than an hour. Since most attorneys charge between $100 and $500 per hour, your fee should be about this much. What can you do if you can’t afford an attorney? You might be able to get help from the Legal Aid Society in your area. It’s basically a law firm for poor people. Alternately, if there is a law school in your area it may have a legal clinic and an attorney or law school student that would review your agreement for free.