Are you having problems keeping up with your monthly credit card bills and/or loan payments? If you are then, we’re certain that the constant reminders and harassing calls you receive from your creditors, demanding payment are starting to get on your nerves. Now, is there a way to attain immediate relief from your financial obligations? Yes, there is: simply pay off your past due accounts, right away.
There aren’t any tricks or big secrets involved here. Your creditors will stop calling once the money is in their hands, or you have made a payment arrangement.
Keep in mind that any delay in paying your debts will not just cost you a great deal of cash, it will adversely affect your credit report. Don’t have the money to pay even the minimum amount due? Here is what you should do:
Speak with your creditor.
Never try to hide or ignore a creditor’s attempt to contact you. You do not want to wait until your debts are in collections to start negotiations. Often times if you work with the creditor they will lower your monthly payment for a while or even defer it for you. You have to show them good faith that you are not going to try to run and hide from your obligations. By being proactive you can avoid a lot of late fees, and since a repayment plan is in place, most creditors will not report you as late on your credit report.
Work out a settlement.
If you have been avoiding your creditors for a while, and you are now in a position to start repayment, it would be in your best interest to analyze the amount owed. Often times if they creditor has been after you for a while, there are a lot of late fees on the account.
Before you start repayment, call them. Work out a repayment schedule that you can comfortably make each month. Ask them to remove the late fees.
If its been several YEARS since you made a payment, ask them to take some of the principal off too! If you haven’t been paying on debt for more than 2 years, most creditors will charge it off as un-collectible. You actually have more leverage here. Since they didn’t expect to get any money back on this debt you can give them a low ball offer to settle. When I was a bill collector, several savvy consumers would offer me less than 75% of the original debt amount in a lump sum payment. And sometimes my bank would take them up on their offer!
Push the envelope.
Don’t just ask for a little bit off. Start off asking for all late fees removed, reduced principal, and removal of the negative item from your credit report. If you don’t ask, you never will get. The longer you haven’t paid on the debt, the more likely you are to get an amazing amount of the principal taken off.
I’m not saying, don’t pay your bills for years. Keep in mind all that time you are not paying you will have bad credit. No one will want to take a chance on you. I only mention the above because if you are in a situation where you were unable to pay for several years, and you are ready to start the repayment process, you should know you have some leverage.
If you make this kind of offer, make sure you get everything in writing! Do not make a deal with a collection agent if you can help it. Try to talk directly to the lender. Don’t send any money until you have the agreed-upon settlement in writing, on official letterhead.
This is the voice of experience talking! When I was younger I had an account that had been charged off. They offered to waive all interest and late fees if I would start paying it back. So I did. About 5 or 6 months later I noticed a HUGE increase in the amount I owed on my account. I called them to see what happened and they said the person I spoke with wasn’t authorized to waive the late fees and interest owed. So they put it back on the account. I learned the hard way, that if it’s not in writing. Then the agreement doesn’t really exist!
Consolidate past due accounts.
If you are dealing with multiple debts, you may consider taking out a debt consolidation loan to pay off all your past due accounts. This way, continuous debt accumulation due to the monthly interest rates and late fees, can be avoided. If you are dealing with credit card debt, another way to consolidate credit card accounts is to apply for a new credit card with zero interest rate on balance transfers. Thus, you can concentrate on paying only your original debt without incurring APR charges each month.
File for bankruptcy.
In an extreme situation, filing for bankruptcy can be the only solution. Before you decide to take this path, you have to work with a credit counseling service. You can no longer just file bankruptcy on your own. The Agency will go over your financial obligations vs your ability to repay. If you qualify to file for bankruptcy, they will go over the whole process, what you can expect and the possible consequences of having a bankruptcy on your credit report