Repeated phone calls. Threatening letters. Sleepless nights. Dealing with creditors when you are in debt can be stressful and leave you feeling bullied. They want their money and you want a break from your financial hardships, leaving you on opposite sides of the line. Fortunately, you have several options for dealing with creditors and you don’t always have to fight the battle alone.
Peace and Quiet
We know that creditors want their money, which you may or may not be able to give them. Depending on your financial situation, you have several options for handling creditors and obtaining the freedom from credit collections that you have been wanting.
1. Debt Negotiations–if you can afford to pay your creditor some money each month, but not the entire balance or minimum payment, you can negotiate a lower monthly payment amount. Creditors will cease collection attempts once you have successfully arranged a repayment plan. Contact your creditor and ask for a lower interest rate, extended period of time to pay the debt or lower principal amount owed. Be sure to explain your financial situation and express your desire to make timely payments at the lower amount. If you feel that your creditor, or third party collection agent, has treated you unfairly or violated the Fair Debt Collection Practices Act, report the violation to the Federal Trade Commission.
2. Bankruptcy— if you cannot afford to pay your creditors each month or were unsuccessful at negotiating a payment modification, you can halt collection efforts by filing for bankruptcy. Bankruptcy issues an automatic stay order, which legally prohibits creditors from collecting on debts. You will be able to eliminate your debts through Chapter 7 or secure a repayment plan that suits your budget through Chapter 13 without the pressure of being contacted by creditors. Further, your bankruptcy attorney will serve as your representative and mediate any interactions between you and the creditors.