When a tight financial situation leaves you truly unable to pay all your bills according to the prescribed schedule, then difficult choices must be made, as discussed in my previous post. After evaluating your situation and figuring out the best strategy you can come up with, the next step is to make some phone calls. Note: in some cases emails or on-line communication may be the company’s only option, but I encourage you to first attempt to reach creditors by phone.
As much as you might dread the phone call, communicating with creditors is essential if you cannot pay on time. The fact that you called and explained your situation will make a huge difference in their willingness to work with you. This is especially true if you have previously been a reliable customer; creditors recognize the losses people are facing during this unprecedented crisis. A couple of suggestions:
- Be prompt – call them before your payment is due.
- Be honest with them – tell the truth without embellishment or exaggeration.
- Ask if they have any “hardship plan” that would reduce or eliminate the fees or interest that come with late payments.
- Don’t make promises you can’t keep. Example: sometimes people are so nervous that when the creditor says “Will you be able to pay the remaining balance by next Wednesday,” the customer just says yes, even though it is not realistic. If they want a promise that you are not sure you can live up to, consider this option: you can promise that you will make another payment by next Wednesday, although you can’t guarantee it will be the full amount.
- Keep a record of what phone number you called, who you talked with, the date and time of the conversation, and what exactly was agreed.
Need help with all this? In many communities a non-profit credit counseling service is available to help you negotiate the process. To find a reputable credit counselor near you, check with the National Foundation for Credit Counseling; either by phone or on-line, they can do a zip code search to find the member agency nearest you.