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Credit Repair: How To Deal With Your Creditors
If you are in danger of credit problems because you have more
debts than you can handle, there are things you can do at least
keep your creditors reasonably happy.
First, prioritize your debts or rank them in terms of the ones
that can give you the most trouble the quickest. If you're three
months behind on your utility bill and the company is threatening
to cut off your power, you should deal with this debt first.
Second, be sure to keep an accurate log of all phone
conversations with creditors and copies of all
correspondence.
This way, you will have a good record of what's going on, to
whom you spoke last, the date of that conversation and its
result. It's not uncommon for large corporations to have
different people or even different departments contacting you
about late or missed payments. If you keep accurate records, you
will always be able to defend yourself against the claim that you
have been unresponsive or uncooperative.
It's kind of human nature to want to run away and hide from
creditors. But it's better to be aggressive. If you know you are
not going to be able to meet a mortgage or credit card payment,
call the company before the payment is due. Tell the company's
representative why you are having money troubles. Be sure to give
a real reason for your problems such as a divorce or loss of a
job, and not just some feeble excuse.
If you can give your creditors a real reason for being in
financial trouble, you may find that they are sympathetic and
willing to work with you.
Your next step is to arrange a payment plan. When you contact
your creditors' representatives, explain that you know you are
behind in your payments but that you want t make a payment
arrangement. Let them know what you can afford to pay this month
and the next. Make certain they know you intend to make full
payment eventually.
You might also see if one or more of your creditors would be
willing to let you skip a month's payment. Be sure to get all
payment plans in writing. If the company's representative does
not volunteer to mail you the plan in writing, send a letter
requesting that he or she do so. Calculate just how much you can
afford to pay a creditor before contacting the company. Then, do
not agree to pay any more than this, no matter what the company
demands. It may take a number of phone calls before the company
agrees to a reduced payment. If the company keeps saying "no" to
your offer, keep calling until you get a different answer. Or ask
to speak to the representative's supervisor as he or she may have
more authority to work out a plan with you.
Finally, always try to negotiate. Your landlord may be willing
to let you miss a payment now if you make it up at the end of the
lease.
If you have a mortgage, ask your lender if they would take a
60 percent payment now with the promise to make this up over the
next few months. If you will be paying late, explain the
circumstances and ask that at least they waive the late fees.
If you are having trouble paying for your utilities, see if
you can switch to a budget plan or set up a partial payment plan.
Most utilities will not cut off your service so long as you are
making some kind of payment.
You could sell your car and purchase a cheaper one if a car
payment is a problem. If you're going to make a late payment, be
sure to let the lender know in advance. Otherwise, you might find
your car has been repossessed. You might ask for an extension of
the loan. For example, if you have 36 months left to pay, you
might ask to extend this to 42 months in return for lower monthly
payments. And if you are leasing a car, see if you can terminate
the lease early. All the leasing company can say is "no."
Being in serious debt is never any fun. But if you tell your
creditors what you will do and then do what you say, things will
get better.
For FREE help with debt and credit, subscribe today to Douglas
Hanna's free email newsletter "8 Simple Steps to Debt Relief" at
http://www.all-in-one-info.com
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