How to Arrange Debt Repayments with Creditors
Whether you’re seeking advice about debt repayments, or how to negotiate payment terms with your creditors, there are a few things you need to know to ensure its done most professionally and effectively, without getting into any trouble.
While many people choose to hire or consult a debt counselor, to communicate with their creditors for them, some still try to build up the courage to negotiate payments themselves.
When you must negotiate payment terms, it’s generally because you’re struggling to pay your current installments, which could be because of your installments being too high for you to manage, or a lack of income due to retrenchment, losing your job, or any related reason why you’re not earning enough money to accommodate all your expenses.
The first thing to do, when you’re trying to arrange new repayment terms with your creditors, is to work out an accurate budget, that suits your current financial situation. After that, you must decide on how much you’re able to pay towards your unsecured debts, after deducting your living costs.
If your account hasn’t been placed in arrears, you should adjust your budget to continue keeping up with the contractual payments if possible. If not, you should consult with your creditors, to reduce installments.
How do you go about making a repayment arrangement?
The first thing to do is contact your creditors telephonically, or send them a letter via email. In this letter, you should state your current financial situation, and offer a payment-term, or request an extended installment plan, which you can afford.
To support your offer, even more, you must send a copy of your latest budget and list of all your expenses and debts, which must be sent to each creditor. It will enable creditors to be more lenient with you when either accepting or declining your offer. If your budget supports your payment-term request, you’re more likely to negotiate a proper repayment arrangement.
Another tip is to emphasize the reason why you’re not able to pay the relative installments. It will allow you to arrange an agreement to repay your debts accordingly.
It’s important to remember that you shouldn’t feel pressured to settle for an installment you can’t afford. If you can’t negotiate proper payment terms with a creditor, you should consider seeking advice from a debt counselor.