Should I Negotiate with My Creditors?
One of the last things you want to do when you are struggling financially is to talk to your creditors. In fact, if you are being called by your creditors, you may have just stopped picking up the phone. That is not the best option for getting your finances under control. Let’s find out weather should I negotiate with my creditors or not ?
This is also one of the reasons that people often fall prey to companies that promise to settle their outstanding debt. These companies promise to negotiate your debt with your creditors on your behalf. Of course, they charge a fee, but you do not have to talk to your creditors.
Mistakes When Negotiating With Creditors
Instead of paying a fee to have negotiations handled with your creditors, consider doing the negotiations on your own. When attempting to do this on your own, it is important to try to avoid some of the most common mistakes. Bankruptcy lawyer San Diego California is here to help you.
- Mistake #1: Negotiating Under Pressure – Often times when a person attempts to negotiate with creditors it is because he or she is desperate. In this situation, the debtor is at a significant disadvantage because he or she often jumps in with little time to prepare. When you negotiate without taking time to prepare, you may not have had time to think of the consequences of the outcomes of the conversation. It is easy to commit to something that realistically will not work for you. Preparation is the key to all successful negotiations. The creditor will often push you as far as possible without taking into consideration what is workable for you. You also need to know what you can promise without creating a critical situation for you down the road. If you receive a notice in the mail or a phone call that is alarming, take time to do some investigating and figure out your financial situation before you pick up with phone. If you are caught off guard by a phone call from a creditor, tell him or her that you need to talk to your spouse or crunch the numbers and make a plan before discussing anything.
- Mistake #2: Focusing on Only One Creditor – This often happens due to the pressure mentioned in Mistake #1. You have heard the term that the squeaky wheel gets the oil, and that same rule applies to a creditor who is loud and persistent. The danger of this is that when the call is over and the arrangements to pay one creditor are made, other creditors may still be calling and you may not have enough money left over to satisfy the other creditors when they come knocking.
Bankruptcy attorney San Diego California knows that when the situation is worse, then nothing seems to be correct, and people tend to take wrong decisions under situational pressure, which gives inevitable setbacks in the coming time. People find it challenging to connect with people and get help.
Before you start negotiating with creditors, put them in order of priority. Try to keep your bills current but consider the consequences of each debt, which depend on the amount of the debt and the type. For example, keeping on top of your house and car payments should be more important than your credit card debt. After prioritizing your debt, figure out how much money you have for each creditor and start applying this to your highest priority debts. Do not commit finances to any lower priority creditor until you have the high priority debts under control.
Contact an Experienced Bankruptcy Attorney Today
If you feel like you are drowning in debt and do not know what your options are, contact the attorneys at BLC Law Center today. We can review your situation with you and advise you what your legal options may be. Whether your best option is to negotiate your debts or file bankruptcy, let us help you get your finances back on track.
(image courtesy of George Morgan)
