The Best Time To Negotiate With Creditors

 by: Michael Saunders

The Best Time To Negotiate With Creditors

In most cases, it's best to deal with creditors before you actually miss a payment. Creditors are much more willing to work with you if you've paid your bills on time. They're trusting that you'll continue to honor your obligations - even if it means paying only minimum payments or even less than the minimums if that's to agreement that you stick with.

If your credit is already shot, at other times, it's often more advantageous to negotiate with creditors after the debt you owe is so old that the creditor has practically forgotten about it. What do we mean by this? Let's look at the two following scenarios.

Say you lose your job unexpectedly. Statistics show that it's not easy (or fast) to find a replacement job. On average, it will take about one month to replace every $10,000 in income lost. So if you were among the top 1% of wage-earners in this country, and you had a six-figure job paying $100,000, it will probably take you about 10 months to find a similar-paying job.

Likewise, if you were earning $40,000 a year, on average, it will take you four months time to find a comparable-paying position. In the meantime, if you don't think you can pay all your bills, start calling your creditors immediately. Ask them to lower your interest rate, even if only temporarily. Again, credit card companies and other lenders are much more willing to be flexible for people who take the time to initiate the process of working out a payment plan, a reduced interest deal, or whatever.  (continued...)
The Best Time To Negotiate With Creditors
  Page 2

About The Author

Michael Saunders has an MBA from the Stanford Graduate School of Business. He edits a site on Credit Repair and Debt Consolidation and is president of Information Organizers, LLC.

“I think, by 2018, there’s an opportunity for New Orleans to be viewed around the country, around the world, as a hub of entrepreneurship for the South,” says Tim Williamson, the CEO and cofounder of incubator The Idea Village, referring to the year the city will celebrate its 300th anniversary.

Social Sector Jobs

  Fundraising & Development Jobs
  Executive Director Jobs
  Social Work Jobs
  Social Services Jobs
  Education Jobs

Click here to open the popup

Never miss an update from Papermashup

Get notified about the latest tutorials and downloads.

Subscribe by Email

Get alerts directly into your inbox after each post and stay updated.

Subscribe by RSS

Add our RSS to your feedreader to get regular updates from us.