BEST FINANCIAL TIPS
NavigationHome Protect Your Credit and Identity Cutting Housing, Utilities, Telephone, Furnishings, Cleaning Supply Expenses Cutting Family Clothing and Personal Care Expenses A Cash Flow Technique to Use in Household Budgeting Cutting Family Recreation Expenses Cutting Family FOOD Expenses Cutting Family TRANSPORTATION Expenses Cutting Installment Payments Solving Financial Problems Money Management Recordkeeping How to Balance Your Checkbook Setting Reasonable Debt Limits Acquiring Credit Bankruptcy: Debtor's Last Resort Cash Flow Planning Form For Household Expenses Negotiating With Creditors Budgeting Systems When There Are Two Earners in the Household Budgeting: The Basics and Beyond Essentials of a Home Business Center Investment Basics - Beginnerís Guide Investment Risks and Alternatives Financial Counseling: What, Who, When, and Where Financial Planning Financial Planning Form: Net Worth Statement Financial Planning Form: Income Statement Choosing a Financial Planner About Money and Children
Cutting Installment Payments
How to Talk to Creditors
Don't wait for creditors to contact you. Call them before bills are due. They will be more likely to believe you. Your first reaction when you discover you can't pay all of your bills is probably to panic and hide. The experts say that's the worst thing you can do. It is better to face your creditors.
Before you call, write or visit your creditors, know the amount of take-home income you can count on, and your fixed expenses (housing, car payment, and other debit payments).
Show the creditor what you think is a reasonable plan for paying the debt. Explain your situation and ask about delayed payments or partial payments.
Revise Your Plan
Work out an agreement with your creditor that both of you can accept and put your agreement in writing. Follow the agreement. If you do not, future chances of getting credit may be influenced by the creditor's view of you and your promise to pay. Always keep creditors informed of changes that might affect your payment agreement.
If you cannot make payments and if the vehicle (car, van, motorcycle, boat or camper) is collateral for the loan, the vehicle might be repossessed.
When a repossession occurs, the vehicle is sold at a public or private auction. If the vehicle is sold for less than the amount still owed on it (often the case), you will still have to pay the rest that is owed.
To avoid repossession, check with the creditor to see if the loan can be rewritten for lower monthly payments. (Remember that this will increase the total finance charges for the loan.)If you don't need the vehicle (if it is a second car, a recreation vehicle or a vehicle more expensive than you need), ask the creditor if you could sell the vehicle and pay the creditor off with what you receive.
No More "Charge It Please!"
If you are late in payments, the company will threaten to cancel the credit card or account. The creditor will use this as a threat, but may not act upon it until several months of late payments. Additional charges are made on the past due balance or what is still owed.
Credit might be canceled when you have a higher amount charged than your credit limit or when you are late in making payments. You might also lose credit when you cannot be located by mail or phone.
If you are past due in credit card payments avoid any more charges on the accounts, call the creditor with an explanation and, pay the minimum charge per month.
If charging is necessary, avoid charging a large amount on any one card or account especially if you are to pay in full at the end of the month or if you are near your credit limit.
If your account is past due because of a billing error, never ignore a billing error. Tell the company immediately so incorrect information can't hurt your credit rating.
Remember, most creditors want to keep a good image with consumers and may accept reduced payments readily and a poor credit rating is likely if credit accounts are canceled by your creditors.
Adapted from material produced by the United States Department of Agriculture and the Cooperative Extension Service in the states of Illinois, Indiana, Nebraska, Northeast States and District of Columbia, and Ohio.
Write new one