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How to diminish your debt by
negotiating with your creditors
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To most
people the concept of negotiating with a creditor is
unheard of. Many people owe money to many different
organisations, I am not talking about debt per se, but
for example electricity and water bills, telephone
companies and other car payments for example. . You can do some
negotiation on your own with such companies, you
don’t need to hire or talk to a debt advisor about
this.
I suggest you first write to your creditors explaining
that you are experiencing some financial difficulty but
that you are more than willing to pay your debts.
If you have already started receiving some reminders or
worse final notices about your accumulating debts than
now is the perfect time to sit down with your creditors
and try to negotiate some new terms that will get you out
of the vicious circle that you got yourself into. Being
in debt does not have to be a permanent situation
it’s only a temporary lifestyle that could
definetely be improved upon with some willingness to do
so on your part.
Diminishing
your loan interest rates.
Most
companies especially utility ones do not start charging
interest rates before one year has passed, so if you try
to draw up a program where you pay your current bills and
something extra every month to cover your older bills
than most companies will definetely be happy to
accomodate you as most probably they would have already
been contemplating court action or some other type of
debt recovery program that would in the end cost them
more money than probably you would owe them!
If on the other hand these companies already started
pursuing you and sending you threatening letters and
especially if they started making phone calls demanding
money, do not let them bully you into forcing you to
promise them that you are going to give them the money
you owe them. The first step in the negotiations begins
with answering back to these letters and telephone calls
with another letter to their chief credit controller
explaining your position but most important of all do not
make any type of promises especially if you know that you
cannot keep them.
When you are writing or talking to your creditors always
include your full details and any account numbers that
may help them track you, remember some debt collection
agencies may have thousands of accounts. If a creditor
has already sometime wrote to you always remember to
include the same reference code that he suggested in his
letter.
You should always give reasons why you are not making any
payments, you can refer to your budget, income or any
other expenses you may have and let the creditor know why
you cannot pay the amounts being requested you can also
ask the creditors to freeze your interest or at least
charge a very low interest rate.
Never attempt to offer any creditor more than you can
pay, if you are going to make any promises just be sure
you are comfortable with them. In a couple of months your
loans should have be already diminished.
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