You probably have seen the commercials about the harassing creditors and have thought that is you. Some days you may not even want to answer your phone. Why is that?
It usually is because some of the creditors you deal with are not very negotiable. If you encounter a problem like this it is best to find a professional who is qualified to help you receive lower interest rates, settle on a reduced amount to be paid in full, or help determine reasonable monthly payments.
That is an extreme situation, however. Most creditors are happy to at least get you on the phone, and all they really truly want is an answer.
How to Talk to Creditors Who Call
If a creditor phones you to ask you when you will be able to pay a bill do not say "I don't know." Saying "I don't know" is the fast track to an unpleasant argument. Instead, if you are on the phone with them say you will pay it on a specific date-even if you do not know if you can.
The only exception would be if you are required to put in writing when you will pay your debts. In this case tell them something such as you will call your accountant. Then, set a date when the creditor can call you back.Dealing with Different Types of Creditors
Of all the types of creditors to deal with, student loan companies are probably the easiest to negotiate with. You have several options before you even become near being in default.
You can obtain a forbearance, receive a deferment (no-interest grace period extension), or simply send in an amount you can afford. They usually will work with you and usually these type of lenders are easy to negotiate with and usually do not require a professional.
The hardest creditors to deal with usually are the credit card companies. They usually are very rigid-even if you are a faithful customer who has paid every month for several months. However, it is usually the high-interest credit card companies.
About Debt Negotiation Help
Different types of debt negotiation help include credit counseling, dept management plan, and debt consolidation. Bankruptcy is another option, although in most cases is a last resort. Please see the definition list below for further explanation:
Credit Counseling: One or more consultations scheduled in order to discuss your financial situation as a whole. Credit counselors will usually ask you some questions about the amount of money you make and help you be accountable as you devise a reasonable monthly budget. Your new financial plan (budget) usually will involve the allocation of money toward repayment of past debts.
Debt Management Plan:Â This is a specific system used by professionals to help people calculate how much of their debt they can pay back per month. This system is usually based on a certain block of time, such as two, three, or five years.
Using this type of repayment plan your financial counselor usually will handle all of your money. All you need to do is deposit it in an account set up by your debt manager (financial counselor).
This system of repayment can be costly, as you need to pay the person who manages your debt for their time. However, often non-profit organizations and churches offer reduced-fee plans for low-income people.
Debt Consolidation: This is the process of combining all your debt together (usually unsecured ones like credit cards and quick loans) in order to only have to make one monthly payment. Financial counselors will usually calculate the anticipated payment schedule of consolidated loans in order to determine if it is worth it for you to consolidate.
If your new interest rate after consolidation will be lower then it would be worth it to combine all your bills. If not, then you probably should not consider this option.
Further Debt Negotiation Information
You can perform a local Internet search to find available creditors in your area. You can also check your local phone listings or ask your friends or family who they would recommend. You can also check the government section of your phone book to see if your state, city, or county offers special low-income debt negotiation programs.
