If you are in difficulties for any reason, rather than seeking bankruptcy as a way out, consider discussing your situation with your creditors. You will be surprised at how many will listen. Of course, some have a reputation for not listening at all – but you still have to try.

When communicating with your creditors, I recommend you document everything that takes place. Keep letters, including copies of letters you may send. If you attend an interview with your creditor, document the proceedings. It is particularly important to document any offers you make, and their response along with any offers they make and your response.

There are several approaches that you can take when talking to a creditor – these include:

  • requesting a moratorium on all payments for a short period of time
  • requesting a moratorium on paying the principal – this means you are making interest only payments for a short period of time
  • requesting a renegotiation of the loan with lower payments
  • requesting reduced payments for a short period of time

It should be remembered that some of these options mean that over the life of a loan, for example, you may pay significantly more than if you simply made the normal payments.

Lenders are not necessarily obliged to make any changes to the loan conditions, even on a short term basis. It is commonly considered good public relations for lenders to accept some minor short term modifications – just don’t count on them. Be sure to document everything and if you have no luck, talk to a professional. If bankruptcy is your only option, they can help you through the process.

Related posts:

  1. Choosing The Right Bankruptcy Option
  2. Bankruptcy Or Foreclosure – Which Is The Best Option?
  3. Credit Counseling Is Not An Option – It’s Compulsory