It's rule number four, but getting in touch with creditors is one of the most important things to do to get control of your personal debt.
Ignoring creditors is the worst thing you can do - debts mount up, the problem isn't addressed and neither is the great personal distress.
So think about which way you would prefer to get in touch with your creditor - through a call, an email or a letter.
All financial institutions will have call centres and during this recession they will be well versed in dealing with calls about unpaid debt.
What to say in a phone call
Most mortgage companies will have a customer service phone centre. These can be impersonal and you are not guaranteed to get the same person every time.
So if you can try and establish contact with one individual in your bank. Write their name down and always request them in subsequent calls. It helps to form a personal relationship with them.
You are unlikely to get the same person in other companies, such as a mobile phone company, but the same rule applies – try and form a relationship with the person on the other end of the phone and it is more than likely they will be helpful.
What to say in a phone call or letter
Start your conversation by explaining what you are ringing about.
Then explain that you are not refusing to pay, but that you are looking to reduce your payments owing to redundancy/loss of income etc. You will be surprised how far you will get.
Things to look for from a mortgage company that will reduce payments
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Switching to interest-only payments for a year
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A mortgage holiday – a suspension of payments for a few months until you get back on your feet
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Or an extension in the number of years in the mortgage term
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Things to look for from a credit card company
- Ask for an ‘interest freeze’ until you get back on your feet
What to put in your letter
Address
Date
Name of creditor
Re Account No.: Insert your account number here
Dear Sir/madam
I am writing to you regarding the above account.
The purpose of this letter is to inform you that I am currently experiencing financial difficulties and am in the process of trying to resolve them.
I am at present assessing my full financial situation and working out how much I can pay to each of my creditors taking into account all my living expenses and commitments.
While I am undertaking this process, it would be of immense help to me if you would put a hold on any action being taken to recover this debt, also if you would suspend any interest and other charges currently being added to this account.
May I take this opportunity to thank you in advance for your co-operation.
Yours faithfully,
Insert your name here
You can also seek a meeting – over the phone or in person with your lender.
