When you reach the position where you can't afford your debt
repayments, it's time to take action.
Instead of running from your situation you need to take positive
steps to fix it. If you reach the stage where you can't keep up
with the repayments, it's VITAL that you contact your creditors
as soon as possible and explain your situation.
It will help your situation greatly if you mange to contact your
creditors before they contact you.
It will show them that you take your situation seriously and
have taken responsibility for the state of your finances. It
will reassure them that they're more likely to receive their
money....eventually!
Now this may be hard to believe, but
your creditors won't
want to take court action against you unless it's absolutely
necessary.
Would you like to know why? Well first, all court action is time
consuming, costly and unpredictable. It's generally a last
resort, when all other avenues have been exhausted.
Second, it's a question of maths. It's just a simple commercial
decision. If you were in the business of lending money and
someone was having trouble repaying you, let me ask you a
question. Would you rather receive all of it over a much longer
period that originally agreed, or 20 cents in the dollar months
later when the bankruptcy courts get it all sorted out?
Exactly! There's no contest. Bankruptcy benefits nobody (well,
apart from the lawyers and accountants, but that's another
matter!)
And most lenders realise this!
If they're offered a reduced payment schedule over a longer
period, most will be glad to accept it. In most cases it will
allow them to receive more of their money back than the
alternative of bankruptcy. And that my friends, is your
opportunity to find a solution to your debt problems!
Contact Your Creditors Early
As soon as you know you won't be able to keep up with your
repayments, get in touch with your lender. Write to them
explaining your situation, giving them the reasons for your
financial difficulties. Creditors will often be open to
negotiation, and dare I say it, quite helpful. As I say, they
just want to ensure that they get as much of their money back as
possible. It may be possible to work out a more suitable
repayment schedule that will allow you to pay off your debts.
If you ignore your creditors, they'll have you in court quicker
than you can say bankruptcy! Ignoring letters from creditors
tends to make them ratty. Remember, they don't want to take
legal action, unless your actions force them to! But if your
general attitude says to them 'I'm in this position because I
spend recklessly and have a cavalier attitude towards my debts',
they won't have any choice.
Once you've drawn up a
p
ersonal budget and know how much you can afford to pay
towards your debts each month, contact your creditors and make
them an offer. It's best to keep your offer of reduced monthly
payments as brief and precise as possible. But above all, make
it honest and realistic.
This is good
'I would therefore like to offer $15 per month
to repay this account'.
This isn't
'I'm hoping that things will get better over the
next couple of months, so I'll increase my payments as much as I
can at that time'. Rubbish! The lenders would laugh in your
face at that sort of offer!
And whatever happens, when it comes to making an offer of
reduced payments,
don't bluff your creditors.
About the author:
by Stuart Laing
Copyright (c)
Get Out Of
Debt.
Are you tired of being in debt? Do you resent the large
repayments every month? Visit
www.icanhelpyougetoutofdebt.com
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