If you are currently in debt or headed that way, then you will eventually have to talk to your creditors. However, in most situations, you should not feel nervous about this looming task as the majority of lenders would rather work out a financial solution than see you fall further and further into debt. If you have recently been laid off or have had some unexpected expenses (such as medical expenses) forced upon you, then it is often in your best interest to contact your creditors as soon as possible to tell them of your situation. Do not wait until you cannot make a payment. You will not look like a very credible customer calling your creditors at that point after you have missed paying a couple of monthly bills. Time is of the essence, and you should strike up a conversation when you are paying your bills on time but know that trouble is looming.
Working Out A Payment Plan
If you wait to negotiate some type of credit solution or alternate payment plan with your lenders after you have fallen somewhat behind in your payments, they may not be as motivated to help you. The lender may turn your account over to a collection agency the longer you wait. However, if you choose to talk to your lenders or creditors at the first sign that you may be in financial trouble, they will be more likely to work out some type of arrangement. Contact creditors before you miss a payment and you’ll avert receiving any negative marks on your credit report.
Revamping Your Debt Payments
If you do work out an arrangement, make sure the payments can be met. You do not want to make any types of pledges to pay and then end up defaulting on your new promises. While negotiating your payments, make certain that you get the new terms of your agreement in writing. Even an email stating the new terms can count and be used in your defense later. Be detailed in this regard. Obtain the name of the creditor, the time and date you spoke to a representative and what agreement you reached. If you talk to a credit representative who is less than helpful over the phone, then end the conversation and call back later. Find another representative who is more professional.
Third Party Bill Collectors
If you find yourself in a situation where you have missed some payments, then you will start to receive calls from debt collectors. These third party agents are usually hired by lenders and financial institutions to collect late payments on their behalf. You need to know your rights as a consumer. Consumers are protected by the Fair Debt Collection Practices Act. There are many rules that debt collectors must follow, and it benefits you greatly to learn them if you are having problems. For example, a debt collector may not call you at work if he has reason to know that your employer forbids such types of calls at work. To curtail them from calling you at work, you or your employer must tell them that you are prohibited from receiving such calls at your place of employment.
The more you know and the more information you have will enable you to better communicate your needs with your debt collector. You should not have to put up with bad or unethical behavior from them. You can negotiate a new repayment plan in most cases if you address your issues to them as soon as possible before you start missing payments.
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