Negotiating Informal Debt Repayment Plans uk

Ask a DEBT EXPERT... Fill in this form for a FREE Debt Consultation....

Your name

Town or city

In UKOutside UK

Email address

Telephone

Best time to contact

Regular income?
YesNo

Approximate debt

Using a Debt Management Company to Negotiate on Your Behalf - Very often, trying to negotiate with your creditors can be a daunting prospect especially if you are not 100% certain of your rights. Using a debt management company to negotiate on your behalf will help you avoid this. The company may also offer to share out your payments to multiple creditors on your behalf meaning that you only have to worry about a single affordable payment each month. If you feel using a debt management company may suit you better than trying to tackle the creditors yourself, then look at the following advantages and disadvantages first before making the call.

Advantages

Disadvantages

The company is more likely to be able to reach agreement with all creditors due to their experience and credibility

You may have to pay a fee for a company to work on your behalf – always ensure you know what this will be.

The company has better understanding of the law and what is acceptable and unacceptable on your behalf – therefore giving you the best representation

You will have to trust someone else to manage the situation on your behalf

The company are dealing with the creditors therefore reducing your stress – the more stress you can get rid of the better!

Managing the Negotiations Yourself - negotiating with your creditors yourself will cost you nothing and gives you ultimate control. However, using this approach means that you will have to face your creditors yourself which is not always easy particularly if there are a lot of them. In addition, you need to consider if you have the time and ability to follow this through. If you have, then consider the following advantages and disadvantages first:-

Advantages

Disadvantages

You won’t have to pay any fees to an external company

You might find it difficult to reach agreement with all of your creditors – particularly if you have more than 3

You have control what you say to who and when

You most probably won’t have as much experience and understanding of the law and what is and isn’t acceptable, therefore leaving you more open to intimidation

This will add more stress to an already stressful situation – will you be able to cope?

Top Ten Tips in Dealing with Debt/Creditors Yourself

Communication - Communication is the key to successful negotiations with creditors. Do not ignore their letters. Answer them promptly by letter or by telephone. If you promise to contact someone by a certain date, make sure you keep your promise and contact them even if only to tell them when you are going to make a payment to them or advise why there is a delay.

Mind Your Manners - It never pays to get angry with anyone, even when you feel justified in doing so. Always be polite and courteous even in the face of being treated rudely. It takes the wind out of their sails. If someone is acting negatively with you and you react negatively, it always makes the situation worse. As a debtor your objective is to persuade someone to be sympathetic to your circumstances.

Don't Take Any Nonsense - Don't take any nonsense from anyone. Make sure that you have calculated what you can afford to pay each creditor and stick to the plan. Offer to send them an income and Expenditure statement if necessary. Do not allow yourself to be intimidated. 100 years ago we used to have debtors prisons in the UK. This is not the case now! If it was, we would not have enough prisons to house even a small proportion of debtors! The worst that can happen is that a creditor will obtain a court judgement against you and take money from you on an involuntary basis, which you can avoid through several ways explained in this website.

Get It In Writing - Get it in writing. Always create a paper trail. This starts with your records such as invoices, credit card statements etc. Every telephone call, letter written/received and offers made. Always make a note of the date and time and to whom you have spoken and if necessary confirm all conversations or offers in writing.

Don't Bluff - If you make an offer, make sure that you can do what you have promised. Don't tell creditors what you think they want to hear. Tell them what you really can do making sure you follow through.

Make your offer as brief and precise as possible - Explain the reasons for your current financial difficulties and then come to the point and make the offer. Make the terms of the offer precise. Do not leave things open ended such as "things should pick up during Christmas and I will increase my payments if I can".

If You Get into Trouble - If you get into trouble after you have negotiated an offer and you can't adhere to the arrangement, contact the creditor in advance. Attempt to send a portion of the funds you promised with a proposal to make up the balance, or renegotiate the entire proposal. Do not wait to contact the creditor until after you have missed a deadline for payment.

Protect Yourself - If you receive Court or official papers, DO NOT IGNORE THEM. Make sure you know how much time you have until a legal response is required to be filed with the Court. This is usually set out on the Court or official papers. Then make sure your complete the documents and return them on time. If you need help with this, then get advice.

Be Realistic and Fair - Always be realistic with your offer. Only offer what you can actually afford. Ensure you complete your statement of means as accurately as possible, not forgetting expenses such as school expenses, child minding, cigarettes, TV licence etc. Do not however insult your creditor by over estimating your expenses, such as entertainment, dining out etc. The majority of creditors are fair and they will expect realistic payments within your budget.

SITEMAP