Contacting Your Creditors
If you find yourself struggling to pay your bills each month, you may want to contact your creditors to see what options they can offer. While this can be a humbling or scary thought, it is important that you take a proactive approach with dealing with your financial difficulties. Here are some steps you can take to help you with the process.
Do a Self Appraisal
Make sure you know your financial picture. It is important that you compare your monthly net income with your monthly expenses. Keep in mind your priority debt payments as well as necessary living expenses. Determine the amount you can reasonably afford to send to each creditor. Get organized before speaking with your creditors so you are prepared and know exactly how much you can afford.
The creditors will want to know why you can’t pay your bill, if the situation is permanent or temporary, and what solution you are proposing. If it helps, write all this out ahead of time so you can refer to it during your conversation. Make sure that you are respectful and steer clear of placing blame on the creditor. Do you want a lower payment and for how long? Are you looking for lower interest rates, or would you like the late fees or over limit fees waived? Consider your situation when deciding what to ask for. For instance, if you are temporarily out of work, perhaps ask if a reduction of payment for the next 3 months would be possible. Another consideration is your credit report. You may ask for the creditor to allow for some leniency in the reporting of late payments.
Making the Call
When you finally pick up the phone to call the creditor, make sure you are speaking with someone in the correct department who has the authority to review your account with you. At the onset of the call, briefly explain the reason for your call and ask the representative to connect you with the proper area. Good rapport is important here. If you start off demanding, you may find that the company may not be as willing to work with you. Once you get to the right person, let them know your current situation and your proposal. Understand that you will need to be patient, persistent, and perhaps ready for a little negotiation. Remember the solution has to be mutually beneficial but don’t agree to something you know you can’t follow through with. Also, make sure to always maintain your composure. Crying, yelling, name calling and using profanity will not get you the desired results.
Once you have agreed to terms with the creditor, make sure to comply with what you have agreed to. If you agreed to send them proof of layoff, disability or a financial statement, send it to them right away. Ask the creditor for the agreement in writing. Keep this document with your financial records in case of a dispute later on. During your financial hardship, it will be important to also maintain regular contact with the creditor, especially if your situation changes for the worse.
While it can be intimidating to call a creditor, remember that the earlier you call them, the more options you will have available to you.