Communication is the key to successful negotiations with creditors. Do not ignore their letters. Answer them promptly by letter or by telephone. If you promise to contact someone by a certain date, make sure you keep your promise and contact them, even if only to tell them when you are going to make a payment to them or advise why there is a delay. Keep communication channels open with your debtors so they are constantly informed.
Mind Your Manners
It never pays to get angry with anyone, even when you feel justified in doing so. Always be polite and courteous, even in the face of being treated rudely. It takes the wind out of their sails. If someone is acting negatively with you and you react negatively, it always makes the situation worse. As a debtor, your objective is to persuade your creditors to be sympathetic to your circumstances.
Don’t Take Any Nonsense
Make sure that you have calculated what you can afford to pay each creditor and stick to the plan. Offer to send them an Income and Expenditure statement if necessary. Do not allow yourself to be intimidated. 100 years ago we used to have debtors prisons in the UK. This is not the case now! If it was, we would not have enough prisons to house even a small proportion of debtors! The worst that can happen is that a creditor will obtain a court judgement against you and take money from you on an involuntary basis, which you can avoid through several ways explained in this website.
Get Repayment Agreements In Writing
Get any agreements in writing. Always create a paper trail. This starts with your records such as invoices, credit card statements and so on. It includes every telephone call, letter written/received and offers made. Always make a note of the date and time and to whom you have spoken and, if necessary, confirm all conversations or offers in writing.
If you make an offer, make sure that you can keep your promises. Don’t tell creditors what you think they want to hear. Tell them what you really can do and ensure you follow through. Bluffing will only result in you staying in the debt trap rather than escaping from it.
Make your offer as brief and precise as possible
Explain the reasons for your current financial difficulties and then come to the point and make the offer. Make the terms of the offer precise. Do not leave things open ended such as “things should pick up during Christmas and I will increase my payments if I can”.
Contact creditors in advance
If you get into trouble after you have negotiated an offer and you can’t adhere to the arrangement, contact the creditor in advance. Attempt to send a portion of the funds you promised with a proposal to make up the balance, or renegotiate the entire proposal. Do not wait to contact the creditor until after you have missed a deadline for payment.
If you receive Court or official papers, DO NOT IGNORE THEM. Make sure you know how much time you have until a legal response is required to be filed with the Court. This is usually set out on the Court or official papers. Then make sure you complete the documents and return them on time. If you need help with this, then get advice.
Be Realistic and Fair
Always be realistic with your offer. Only offer what you can actually afford. Ensure you complete your statement of means as accurately as possible, not forgetting expenses such as school expenses, child minding, cigarettes, TV licence and so on. Do not insult your creditor by over estimating your expenses, such as entertainment, dining out. The majority of creditors are fair and they will expect realistic payments within your budget.
Never Give Up
Every year thousands of people resolve their debt problems and get their lives back on track. There is a debt solution for everyone. And remember, it is in your creditors interest to help you to pay them back, even if it takes longer or they recover only part of the debt, it is better than not receiving any payment from you, or having to continuously chase you for payment (which costs them money).