University of Illinois Extension

Talking with Creditors

When your income drops and you realize you can’t pay all your bills, it’s important to face your debts and know how to communicate with your creditors.

Your past experiences with creditors are important. If you have consistently paid bills on time, your creditors will be more cooperative than if you were late or didn’t make regular payments. Creditors are in the business of lending money and/or providing services. They want to keep your business, but they also want to get paid.

Contact your creditors immediately; don’t wait for them to contact you. Explain your current situation. Tell them your family income is reduced, and you are not able to keep up with your payments. Frankly discuss your future income prospects so you and your creditors can figure out solutions to the problem. Most creditors would prefer to receive smaller payments on a regular basis than to begin expensive collection procedures.

Where To Begin

Before you and your creditors agree on a reduced payment or some other solution, determine how much money you have to pay off your debts. Figure out how much income you can count on each month and how much you need to pay for your essential monthly living expenses. You’ll need to know who you owe, how much you owe, as well as how you plan to pay them. Managing Debt: Deciding Which Bills to Pay First can help you review your family situation and figure out a plan to divide your income to pay your family monthly living expenses and set priorities for paying bills.

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