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Plan Well, Retire Well

Saving and investing your money

Contact Your Creditors Before You're Late


Paying bills on time might seem like a simple thing but it is something that many people struggle with. Sometimes the problem is being disorganized, but sometimes the problem is that there is not enough money to pay all the bills.

Things can happen in our lives that we don't expect (whether it's reduced income or unexpected emergency expenses) that can make it difficult to pay bills on times. If this happens to you, it's important to figure out a plan of action and contact your creditors BEFORE you're late on a bill.

Before you call your creditors take time to look at your income and essential living expenses, and make a plan. Who can you pay and how much can you pay? For more help with this process, visit the website Getting Through Tough Financial Times and read Talking with Creditors. Don't forget to talk to all your creditors -- credit card companies, landlords, utility companies, etc.

The key points when you talk to a creditor are:

  • Be organized – know what you can pay
  • Be prepared to explain why you cannot pay
  • Make a plan – what you can pay now – how you will catch-up on the payment
  • Document agreements in writing

What should you ask for from your creditor? It depends on your financial situation and how long you expect to be short of money. However, consider asking your creditor if you can:

  • reduce the monthly payment,
  • refinance to a lower interest rate,
  • skip a payment,
  • reduce, eliminate or only pay the interest, or
  • give back an item.

Remember, once you have a plan and agreement from your creditor then you are expected to follow this new plan. So, be sure it's something that will work for you.

Do you have other tips to share with people about working with creditors? Click on my name below and let me know your ideas. I will share them in this blog.



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