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Financial Services >
Personal Loans
> Advice
> Dealing
with Creditors
Communication
Communication is the key to successful negotiations with creditors.
Do not ignore their letters, and bury your head in the sand the
problem will not go away. 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 him or her even if
only to tell him or her when you are going to make a payment.
As long as you remain in contact they are normally very helpful.
Don't Take Any Nonsense
If a creditor is harassing you or a company employed by a creditor
take the name of the individual and report them to their manager
then to the head office.
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 and
always speaks to the person how you would like to be spoken to.
If they are rude report them to their manager. 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
someone to be sympathetic to your circumstances.
Have It In Writing
Have it in writing it is proof or it’s just your word
against theirs. Always keep a log of all paper work. This starts
with your records such as invoices, credit card statements etc.
Every telephone call, letter written or received and offers made.
Always make a note of the date and time and to whom you have spoken
to and always confirm all conversations and offers in writing.
Don't Bluff
If you make an offer, always make sure that you can do what
you have promised. Don't tell creditors what you think they want
to hear, if you can only afford to pay a £1.00 say so, they
would prefer to have a £1.00 rather than nothing at all.
Don't threaten creditors with bankruptcy
Most creditors and their agents hear these types of threats
every day and it will not help at all. You will just be putting
up a brick wall that hinders negotiations. Creditors are likely
to become more aggravated and their standard reply is go ahead
and file. There is a way to do this indirectly in the context
of explaining your adverse financial circumstances, with an inference
that bankruptcy is a possible alternative in the event that the
creditor does not accept your offer.
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 do not say you
think you may be able to pay more in a couple of months set a
figure and stick to it until you are shore you can pay more.
If you get into trouble
If you get into trouble paying the negotiated amount and you
can't adhere to the arrangement, contact the creditor immediately.
Try 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 for the creditor to contact you after you have missed
a deadline for payment, it will make things worse.
Cover Yourself
If you receive Court or official papers, cover yourself. Make
sure you know how much time you. This is usually set out on the
Court or official papers. Consult with either a Citizens Advice
Bureau or insolvency practitioner or a solicitor regarding your
rights or the means to resolve the claim without going to Court
it will be fare better if you can. If you contact the creditors
or their agent and start negotiating the claim, make sure the
response to deadlines is postponed to a date that you can keep
to. This postponement must then be confirmed
in writing.
Be Realistic
Be realistic with your offers. Only offer what you can actually
afford even if it’s a £1.00. Ensure you complete your
statement of means as accurately as possible, not forgetting expenses
such as school expenses, child minding, TV licence and must pay
house hold bills etc. Do not however insult your creditor by over
estimating your expenses, the majority of creditors are fair and
they will expect realistic payments and most will try to help.
Consumer credit act
A UK Act of Parliament aimed at protecting the borrower in credit
agreements, loans, and mortgages. The Act requires full written
details of the true interest rate (i.e. annual percentage rate)
to be quoted; a cooling-off period to be given, during which borrowers
may change their minds and cancel agreements; and all agreements
to be in writing. The Act does not cover overdrafts.
(Dictionary of Business, Oxford University Press)
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