Dealing With Creditors
by, Michelle Rothwell
Yikes! My
red bottom line is bigger than I thought!
Most of you
got our free Personal Net Worth Calculator last month. This is
a free tool to help you see a quick picture of where you are
financially. You can use this for your personal finances as
well as your business finances.
Now the
rubber meets the road. How can you lower your debt? When my
husband and I used the Personal Net Worth Calculator for the
first time, June 1, 2008, we were over
$12,000 in the red. Holy
buckets! How did that happen?
My first
piece of advice, don’t do a debt reduction plan. This will be
murder on your credit. It is far worse than having a
bankruptcy. Not to mention you have to pay taxes on the money
you were excused from paying. This will be reported to you on a
1099-Misc from the creditors.
Talk about
double trouble.
When my
husband and I ran into credit trouble we first went to our local
credit counseling agency. They’ve helped us out before but this
time they wouldn’t touch us.
“What chew
talkin’ about, Willis?” I thought these people helped
everyone. Well not this time. We didn’t fit into their
parameters.
So what do
we do now? How do you get out of this mess? We prayed.
Within a
week we had our answer. If the credit counseling companies
could get the creditors to lower their payments and interest
rates, why couldn’t we?
We started
making phone calls. We called customer service for every single
debt we had. Some companies were extremely helpful right away
and got us to the person we needed to talk to.
Some
companies said no way. So the next night we called those
companies again. Same answer, no way. The third time we called
we found someone helpful. Be persistent.
Keep at it
until you find someone willing to work with you. We were able
to make deals with EVERY SINGLE COMPANY. Granted some of the
deals were better than others. Some of the companies would only
let us do it for six months but that’s what we needed.
The clout
that helped us is we knew exactly how much was owed, what the
monthly payments were and what our interest rates were. We told
them how much we thought we could pay in a monthly payment. For
those that were tougher to deal with we told them the deals we
had made with the other companies and since they had been
stubborn we didn’t have as much to work with. We made sure the
companies knew we wanted to get them paid off.
Because of
the success we had in contacting these people and actually
making the payments on time, some companies we were able to get
the due date changed so it would fit better in our month, within
six months we were in the black.
How’s that
for results?
From
$12,684.36 in the red, June
1, 2008, (Can you tell I’m an accountant? I count every penny.)
to $453.17 in the black by December 1, 2008.
Yes, you
can do it too. The key is to get started today. Don’t wait
until they call you because then your interest rates start going
up. The sooner you start the lower you will be able to keep
your interest rates and keep your credit score good.
Now don’t
get me wrong that isn’t the only thing we had to change but I
will share more with you in next month’s article.
Until next
time,
Michelle
Rothwell
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
About the
author. Michelle Rothwell is an accountant for the Perham Area
Community Center and a part time work at home Mom. In 2007,
Michelle launched her website
Dora & Diego Homeschool Spanish to teach Spanish from a
Biblical world view to homeschool families and to coordinate
mission trips to Spanish speaking countries.[go
back]
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