Business & Finance

Tips on Negotiating With Creditors Post Pandemic

The Covid-19 pandemic hugely impacted people, leading to a loss of income and the closure of businesses. This saw people getting into debt to keep things afloat. But with a drop in income, repaying those loans hasn’t been easy. If a creditor has been calling you because of a loan you took, the last thing you may want to do is to talk to them. But have you considered negotiating your debt? Take a look at these tips that can help.

Determine if Negotiation Is Right for You

How will you know if negotiation is right for you if you don’t calculate how much money you owe? When choosing this method of settling debts, you need to know the amount of debt you owe lenders. Be honest with your assessment, as that’s the only way you’ll come up with a debt management plan. Most creditors are willing to negotiate with you. Why? They know that negotiation can incentivize you to repay the debt, which is better than them getting nothing.

Stick to Your Story

Most creditors don’t want to hear every detail about why you can’t repay your debt. However, they need to know you’re facing a hard time, and that’s why you can’t come up with the money at the moment. For instance, you can say something like, ‘I’ve been unwell and out of work for a couple of months, but now I’m trying to catch up with the late payments.’ Be honest with your story. Don’t tell different lenders different stories because it will backfire on you.

Request New Terms of Payment

If your interest rates are too high, check if the creditor can accept to reduce the percentage. Others will refuse but extend your loan repayment term, giving you more time to come up with the money. Some can forgive you the accrued fees if you start making monthly payments. You can also consider consolidating your debt by approaching a lender like Priority Plus Financial. It will be much easier to settle a new loan with new terms than dwelling on the debts you took during the pandemic.

Take Notes

As you negotiate with your creditors, make notes of all communication. Note who you speak to, the time of the call, and what you discuss. This is especially important if you’re negotiating with different creditors. Writing notes will help you remember what each creditor wants and the new terms they offer.

Know Your Rights Under the Fair Debt Collection Practices Act (FDCPA)

Not all creditors are friendly. Some will send debt collectors to harass you. In such a case, it’s important to learn what the Fair Debt Collection Practices Act (FDCPA) says about your rights. Collectors aren’t allowed to threaten you with an arrest, shame you publicly or use harassing tactics. If certain lenders threaten you using such tactics, write to them and insist they stop. They are required by law to honor your request.

Most creditors understand that the pandemic took a toll on people’s finances. That’s why they’re willing to negotiate, as they don’t want to lose money. Instead of dodging your creditors’ calls, why not try negotiating?