Dealing with creditors can be stressful.  Creditors can be aggressive and they will tell you that your failure to pay the debt will cause them to take legal action against you.  So what are your options?  Below are the some things to consider.

  1. Pay the debt.  

Unless you declare bankruptcy, you will likely need to pay the debt off in some amount.  Also, it is clearly the right thing to do unless you dispute the debt amount.  The earlier you attempt to pay the debt, the less interest and additional costs will be incurred by the creditor.  This may make the creditor more willing to settle for a smaller amount.  However, it is not uncommon for creditors to make settlement difficult.  This has two purposes.  First, creditors want to receive as much money as they can from you and creditors have the right to demand you pay the full amount.  Second, creditors do not want to make settling your debts an easy process because the easier it is, the more likely you are to repeat the process and/or tell others that it is easy.

  1. Paperwork is the key. 

Keep all of your paperwork when dealing with creditors.  Try to get the names and badge numbers of each individual you speak with on the phone.  If you ever enter into a settlement agreement, make sure that it is in writing with both parties signing.  Never, never, never be satisfied with a verbal offer of settlement from a creditor.

  1. If you do agree to settle, do not give your creditor direct access to your bank account.

Giving the creditor direct access to your bank account will allow them control over payment of the debt. This makes it difficult for you to recover any extra moneys that they may pull out “accidentally”.  The best case scenario when settling is that you pay one lump sum settlement amount with a check, allowing you to be done with the creditor for good.

  1. If the creditor filed a claim against you in court, then you can fight it or still try to settle. 

You have the opportunity to settle a debt at any point, even after a judgment has been entered against you.  Once you pay the agreed upon settlement amount, make sure that the creditor files a satisfaction of your debt with the court.  If the creditor does not do this, your credit score will indicate an unpaid debt and the creditor may at a later time attempt to collect the debt against you again.  While you should be able to prove that you have already paid the debt, it will cost you both time and money to fight their collection efforts.

If you have having trouble dealing with a creditor, please speak with an attorney at Udall Shumway PLC.  We can sit down and discuss the best options for you.

 

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Dealing with Creditors, or any other Bankruptcy matters, please feel free to contact Joel E. Sannes at 480.461.5307, or log on to udallshumway.com,  or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.