Unless we’re independently wealthy, most of us face financial troubles at some point in our lives. Sometimes we incur unexpected expenses, such as car repairs or medical bills. Sometimes our income drops due to health problems or job loss. This often results in trouble paying the bills.
Often, those who are having problems meeting financial obligations avoid their creditors. They do this because they believe that the creditor will be unsympathetic and demand payment right away. What they don’t realize is that when we are honest with creditors, they are usually willing to work with us.
It’s true that creditors want to be repaid, and they want their money when it is due. But being inflexible rarely works to their advantage. When creditors demand things that debtors cannot deliver, it can damage the relationship. That means that some debtors pay off their accounts when they are able and then close them, and others become unwilling to pay up at all. The first scenario results in a lost customer, and the second forces the creditor to incur much greater costs in trying to collect the debt.
For these reasons, most creditors are happy to help debtors who have fallen on hard times. They can often extend payment deadlines or waive late fees, and they may be able to set up a more favorable payment schedule. For loans, they might refinance, which can make payments lower and possibly postpone repayment.
Talking to creditors may be intimidating, but if you are straightforward with them, it will usually work out to your advantage. Here are some tips that can help them help you:
* Don’t wait for a creditor to contact you. Call your creditors as soon as you realize that you won’t be able to pay on time. This can help you avoid late fees and shows them that you care about meeting your obligations.
* Be prepared and willing to explain why you can’t make your payment. “I don’t have the money” is not a good enough excuse. Giving a legitimate reason will help maintain trust and make it easier for them to come up with a viable solution.
* Offer to make a reduced payment on time, or give a date when you can make a partial or full payment. Creditors are more willing to work with debtors who do these things, because they demonstrate a commitment.
* If you can’t get anywhere with the first person you talk to, ask to speak to a supervisor. Some creditors have procedures in place that only allow supervisors to make certain concessions.
* Be sure to answer calls from creditors, and answer them promptly. If you’re keeping them up to date they shouldn’t have to call you very often, but if they do make sure that they know you’re not avoiding them.
Dealing with creditors can be a scary proposition, but it’s rarely as bad as we imagine it will be. It is to a creditor’s advantage to work with those who want to repay their debts but are having trouble doing so. Being straightforward with them can save you money, and it can help keep your credit in good shape.