When you find yourself in a serious amount of debt, it’s easy to feel as though creditors are out to get you. Collection calls, threatening letters, and a pile of unpaid bills can cause a feeling of desperation and helplessness in any household.
However, it helps to know that you have options when it comes to negotiating with your creditors and digging yourself out of a big mess by following a few key steps.
Communication
When it comes to negotiating with your creditors, you must keep the lines of communication open. Don’t ignore the pile of unopened bills, they’re not going to go away. Take the first steps to contact the creditor and see how they are able to work with you. Depending on the length of time the bill has gone unpaid, some creditors will be able to settle for an amount less than you actually owe. They should at least be able to work out a payment arrangement that works for the both of you. The main thing to remember is, keep in constant contact with them and take responsibility for your situation. Since many people don’t do this, creditors are more willing to work with those who do.
Keep Records
Anytime you make a payment arrangement or settlement with a creditor, it is of the utmost importance to get the details in writing. There are some collection places that can be somewhat underhanded when it comes to that and if you don’t get the agreement in writing, you don’t have an agreement. Make sure you keep good records during this time so you know exactly where you stand.
My experience with receipts: I had been laid off from my job (for 2-1/2 years!). I used my last paycheck to pay a check that had bounced at the grocery store. It was about $90. I didn’t have the extra 10 or 15 for the returned check charge. The assistant manager said that was ok, he wouldn’t turn the check in to the bank again, and I could pay the extra when I could. I was so upset over being laid off and having a returned check, that I didn’t think to get a receipt for paying the check. The check was eventually turned over to a collection agency – for the full amount. I went to the store and talked to the manager, he said he didn’t remember me. The people at the collection agency believed me, but couldn’t reduce the amount. They did, however, set up a payment plan for me, something like $5 a month. I later learned that the assistant manager had been fired for stealing from the store. Makes me think he just pocketed my $90. If only I had thought to ask for a receipt!
Know Your Limits
It won’t do you any good to make payment arrangements with a creditor if you can’t afford what they are asking, so be sure your payment plan fits in your budget. If not, you will eventually default on the arrangement and be back to square one. Go into the conversation knowing what you can afford on a monthly basis and don’t back down if they don’t accept it at first.
Don’t Be Intimidated
Many times you will deal with creditors who are mean and hurtful on the phone. They will say whatever they can to get a reaction, or treat you like you are a bad child. When this happens, you are more likely to rush into an agreement before thinking it through just to get them off the phone. Keep your wits about you and breathe.
Don’t let them bully you into paying more than you can afford. If the phone call becomes too argumentative, hang up and call back later to try and get someone else. No matter what the debt is, you don’t deserve being put in a position like that.
These are all steps you can take immediately to help get you back on track. It doesn’t matter how much you owe, how many creditors you need to deal with, or the length of time the bill has gone unpaid. There are always options for someone willing to clean up the mess they have made and it’s not as hard as it seems. With a little patience and organization you will be on your way to cutting your debt, and your stress, in no time.
