Debt negotiators have certain tricks they use to help you when you cannot make your credit card payments on time. And you can use their methods yourself. You can easily talk to your creditors directly, and discuss ways that you can pay off your debts in a reasonable manner.
When you are having difficulty making your monthly payments, it is very important to act quickly. Many people put this off and hope that the problem will resolve itself. It will not.
Act quickly
Never believe that nobody will notice if you just miss one payment. Your creditors (the banks, credit card companies and others that you owe money to) will always notice. They have computer programs set up to alert them, anytime that a payment is more than a certain number of days overdue. They may not contact you right away, but they will still be aware of your status!
Sooner or later, they will write you a letter, and your best chance of reaching a resolution with them is to contact them before that happens. That way, you have the initiative, plus you are showing them that you DO want to talk to them. Debt negotiators always try to reassure the creditor. He needs to know that you are not just going to run out on your debt. So, you should get in touch with the creditor FIRST, if you can. Since you do not know when they will write to you, you need to contact them now. Yes, today would be best!
How to Prepare
The first thing to do is to make a list of all of your debts, and figure out which ones you can pay, and which ones you cannot pay. There are probably some monthly payments that you can already make now without a problem.
For the others, calculate what you could pay, stretching your money as far as it will go. Do you need to reduce your monthly payment amount, and take longer to pay off the loan? Or do you simply need a payment break this month, so that you are skipping a month? This option can be good if your problem is just temporary. But it is only advisable if you are sure you will be able to pay in future months.
Once you know where your finances stand, call the creditor. Make sure that you are talking to a person who has the power to approve your suggestions. Otherwise, you could waste a lot of time.
Making the Call
Ask for a supervisor or a manager, and then calmly go through what you propose to get over your financial crisis. Remember, they can’t get blood out of a stone. If you are courteous and patient, most creditors will definitely be willing to listen to you.
Usually the company is more than happy to negotiate with you. They may not agree to all of your requests. But, with a little flexibility on both sides, you should be able to find an agreement that is acceptable to both of you. They will be glad to know that you DO want to pay off your bill and that you are looking for ways to do it.
They do not want to take you to court or hire debt collectors, if they can avoid it. That is an expensive proposition for them, a last resort to be followed if all else fails.
Settling Your Debt
Having negotiated an adjustment in your agreement, perhaps a reduced payment amount or a reduced interest rate, the company will write to you with the new payment plan. They always like to put things in writing. Check the payment plan over carefully, and then make sure that you do make the payments on time. It is very important to do this, since they will probably be watching your account more closely than usual for awhile.
If you really do not want to talk to the finance companies and banks, you could just hire a debt counselor to help you. However, the finance companies would really prefer to talk to you in person. And there can be numerous problems once you get involved with credit counseling agencies. Not all of them are legit.
People can definitely serve as their own debt negotiators, just by taking a little time to prepare and moving forward confidently and patiently, and this is usually the wisest course of action.
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Mom wants to pay $10K toward our mortgage. She has been advised to dump some money or pay taxes. Our problem is that we have a small business which has incurred about 70K of credit card debt. We are current on everything but have gotten the shaft from the credit card companies and they have raised our rates double and on some triple. My husband wants to put the “extra” money toward the credit card debt with the highest interest (22%) but don’t know how much the mortgage payment will drop with 10K toward principal. We owe $136K on home with 6.375% rate. Please help.
I personally would not apply the money towards credit card debt in your situation, as it sounds like you might be headed toward bankruptcy. This is just my personal opinion, and I’m no expert, but common sense would seem to point towards paying down your mortgage. If you’re still confused about the situation, you need to talk to your tax advisor. Good luck!
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