How to talk to creditors
Tips on how to deal with creditors.
Dealing with debt can be an overwhelming process for some people; but it is a necessary process. When reviewing your financial situation, it is important to list all of your debts, including collections, judgments, etc. Once you list all of your debts; it is time to create a plan for eliminating those debts. You may need to contact your creditors to begin your debt-elimination plan. Some people believe that creditors are unwilling to help, but creditors are often willing to set up repayment plans.
Michigan State University Extension suggests consumers be prepared to explain the following when contacting creditors:
- The reason you cannot pay
- Your current income and prospects for future income
- Other financial obligations you have
- Your plans to bring your current debt up to date and keep it current, including the amount you will be able to pay each month.
Being open and honest may make creditors more willing to assist you with a repayment plan. After contacting creditors, use the Creditor Communication Tracking worksheet so can keep a record of your conversations with creditors. If creditors are local, you may be able to set up an appointment to discuss your situation face-to-face. If creditors are not local, you may want to use a Sample Letter to Creditors as a guide to help you explain your situation to creditors.
These documents are available in The Foreclosure Toolkit. Michigan State University Extension has released a new toolkit for homeowners who are experiencing or have previously experienced foreclosure. This toolkit will equip these individuals and families with tools to help them recover their financial stability, in the case that a recovery of their home is not possible. The toolkit is available to download free at the MI Money Health website.
Michigan State University Extension offers financial literacy and homeownership workshops throughout the year to help you become financially healthy. For more information of classes in your area, go to either the events page or the MI Money Health website. Additionally, you can take the Financial Health Survey at MI Money Health to access if you’re financially healthy and discover more ways you can improve your financial health.