Preparing to Meet with a Credit Counselor
Part of the Managing Debt For Dummies Cheat Sheet
If living on a strict budget is not enough to resolve your financial problems, meeting with a credit counselor to negotiate concessions from your creditor may help. Do your homework and get the following information together for your initial meeting with a credit counselor:
A list of all your debts. Include the amount of your current monthly payments, the interest rate on each debt, whether a certain debt is secured or unsecured, and whether you have fallen behind on a debt (and by how much).
Debt-related paperwork. This includes loan agreements, credit card statements, and any threatening notices you may have received recently from creditors.
Your budget. Take a stab at figuring out how much you can realistically afford to pay on your debts, starting with the highest priority ones.
A list of what you want from each of your creditors. You may need a temporary or permanent reduction in your interest rate, to make interest-only payments for a while, or a temporary or permanent reduction in the amount of your monthly payments.
A list of what you are willing to give up to get what you want. Here are some ideas:
You'll stop using your credit card until your debt is paid off.
You'll allow the creditor to put a lien on an asset you own.
You'll pay more on your debt than what you offered at the start of your negotiations (if you're certain you can afford it) or after you've made a certain number of reduced payments.
You'll give the creditor a balloon payment — a one-time larger payment (if you're certain you'll be able to afford that payment) — in the future.