Personal Finance
DEALING WITH DEBT
Past Dues and Don'ts
Eliot Wagonheim: If I am a Creditor and I hear absolutely nothing from the person who owes me money. In response to all of my past few invoices, I am going to assume this person is dodging me.
Steve Lovejoy: Just ignoring it will tell your creditors that you don't care.
Eliot Wagonheim: This person just has no interest in paying me.
Steve Lovejoy: And if you don't care then they are likely to use the full extent of the law that they can, they will sue you, if there is a car loan they'll come and repossess your car. If you have a mortgage that's secured by your home or home equity line of credit. The Creditor has a right to take your house and sell it in order to repay that loan.
If they sue you and get a judgment against you, a Judgment Creditor can then come after that property. It's a bad, bad idea to ignore your creditors.
Eliot Wagonheim: If there is an open line of communication, the person who owed money won't work with the guy who is trying to work with him.
Steve Lovejoy: And they would much rather have you call him up and work with him and stay in touch with him as to what's going on.
Eliot Wagonheim: I really want to pay. I just don't have it now. I don't know what to do, I got ahead of myself.
Steve Lovejoy: You don't want to sound like you are not paying because you don't want to. You want to sound like you are not paying because you can't.
Eliot Wagonheim: The best strategy for that Debtor is to pick up the phone and say those exact words.
Peter Holland: If they think you might declare bankruptcy or something like that, sometimes they will just rather get paid something rather than get paid nothing.
Steve Lovejoy: Many of them will reduce the interest rate, or eliminate interest payments altogether.
Peter Holland: You can negotiate and say, I'd like to have a lower payment plan.
Steve Lovejoy: So you if you have to skip a couple of payments to get back on your feet, if you have to reduce the amount of the monthly payment. A lot of creditors, most creditors will go along with that.
Eliot Wagonheim: As the lawyer if that's the scenario that's portrayed to me that the Debtor is making payments, but he has just hasn't paid in full, my advice to the client will always be, may be you shouldn't waste legal fees on this, you've got a person here who is trying. Let him try.
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