10 Steps to Talking with Creditors About Your Past Due Bills

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Is your least favorite activity of the day opening the mail? Are the minimum payments you make each month barely making a dent in your overall debt? 

It may be time to call your creditors.

Rather than avoid the phone calls or cringe when you see your monthly statement, why not take control of your financial situation? You may be surprised to learn that creditors actually want you to call them. 

your budgetWhat is the process when calling creditors to talk about your past due payments? Following are ten simple steps to follow when talking to creditor about your debt.

1.      Start by having all of your information at your fingertips before you call. 

a.    What is your total balance? 
b.    What is your monthly minimum?
c.    What is the current interest rate?
d.    What do you hope to have happen – reduced interest rate – lower monthly bill – forgiveness on past due fees?
e.    What monthly amount can you honestly afford to pay each month?
f.    An explanation of why you are struggling to pay your bills.

2.    Once you have gathered your information and have a payment plan that you believe you can stick with faithfully – pick up the phone and give each creditor a call.

3.    Ask to speak with someone who has the ability to negotiate and approve a payment plan. Don’t spend time telling your life story to someone who can’t help you. Verify that the person you are speaking with has that ability to negotiate and then begin your discussion. 

4.    Keep your conversation to your financial situation.  Generally, your creditors do not want to know all of the details as to why you lost your job or that you were injured at work and your employer is contesting your workers’ compensation claim.  Your creditor is most interested in what you are committing to pay each month.

5.    Offer your solution. Make sure you give them clear proposal of what you need and what you can expect to pay. For example, if you are hoping for a reduction to your interest rates and perhaps a one month without payment, tacking that amount to the end of your loan – say that. Avoid conversations like “well, what can you offer me?” Remember, this is an amount that you owe.

6.    Be clear with what you can pay and when. If the monthly amount due is $100 but this month you need that payment over two months and then you’ll be back on track – be specific with amounts and dates.

7.    Be willing to put your solution in writing.

8.    Secure the name of the person you are speaking with, their address and offer to put the information in writing to their attention.

9.    Gain consensus. It is one thing to have the perfect solution from your perspective, but if they don’t accept the terms – it won’t help.

10.    Follow through. Whatever you have agreed to, make sure that you follow through with your end of the agreement. 

Facing confrontation is hard  – no question. It is embarrassing to admit to a creditor that you can’t afford to pay your bills. However, it is better to confront your financial situation and make the call rather than pray you win the lottery. 

Call today. The sooner you call, the sooner you will have established a solution that both of you can agree with. Also, keep in mind that the sooner you call, the more likely you are to avoid a negative report on your credit score. If a creditor is able to speak with you and learn your plans for repayment, the less likely they are to take further, more serious action.

The attorneys at Bankruptcy Advocates are also a great resource.  We regularly advise our clients without fee as to how they can set up a payment plan with their creditors.