Most of us are finding ourselves in situations we never imagined: homeschooling kids while working, exclusively ordering takeout and using grocery delivery, and watching work and jobs dry up at an alarming rate.

Even people with strong financial plans and habits are seeing savings dwindle and debts grow, so dealing with creditors is uncharted territory. However, it can be done. The first thing to remember is to tackle it head-on. It’s not a fun task by any means, but approaching your financial situation with organization and confidence (and without delay) can help you feel more in control, minimize long-term damage and get you back on your feet faster. Use the following steps to guide you through the process.

Step 1 – Lay it all out there.

Before you can fix anything, you have to fully understand your situation. Gather your bank statements, your bills and any collections notices, list out your assets and equity and make sure you have a clear picture of what you have and what you owe.

Step 2 – Know your options and your rights.

Do some research to determine what choices you have for paying off different types of debt. Also, the Fair Debt Collection Practices Act is supposed to protect you from unscrupulous collectors and tactics, so know what they can and can’t do/say to avoid feeling scared or overwhelmed. While it is possible you will receive collections calls, be wary of debt collectors who don’t give you many details or ask you to pay off your debt using prepaid credit cards.

Step 3 – Start sooner rather than later.

Don’t stuff those notices in a drawer hoping they’ll go away. Dealing with creditors instead of collectors is always better and can minimize damage to your credit score. The sooner payments are made, the better, even if they’re already late.

Step 4 – Prep yourself.

Organize your thoughts, even write out a short script (which can help you from letting your emotions run the call), so you can quickly and clearly explain your goal for the call. Prepare a very brief summary of your situation—two or three sentences—that states why you’re in financial difficulty and what you’re doing to fix it. Be honest and straightforward. These reps receive calls like this all the time, so they’ll appreciate a clear, concise statement of the facts.

Step 5 – Get on the phone.

List out all the names/numbers of who you need to call so you can get on a roll. Many financial experts suggest starting with the smallest debts first, or the ones that will be easiest to address. If you choose this strategy, these little wins will motivate you to keep going.

After you share your brief statements from Step 4, tell the rep clearly what you’re hoping to do and ask about your options. If they understand that you are actively working to pay what you owe, most companies will work with you.

If the conversation gets stressful, get their contact information and say you’ll call back later. Don’t be afraid to ask lots of questions to fully understand your situation, take good notes on their answers and if you come up with a plan, make sure you get it in writing.

 

Addressing debt and paying off creditors may not be a quick or easy road, but it can be done. It’s also an important stepping stone to making good financial choices in the future, minimizing future debt and building a solid savings foundation.

Are tough times standing between you and your payments?

Maybe you hit hard times, or maybe your debt has piled up and you feel like there’s no way you can get out of the hole you’re in. We can and WANT to help you. If you are unable to make payments for loans or credit cards you have with Verve, call us at 800.448.9228 to discuss your options.