Contact your creditors

Contact my creditors? Why would I do that?

Making arrangements with your creditors is a way to ease your debt repayments. Draw up a list of your creditors, then contact them with a proposal for either a reduction in your payments, an extended deferral of your debts or a reduced rate of interest (or all three). You can also ask a debt management program advisor to do this on your behalf (refer to the section on debt management programs).

The budget you have prepared will allow you to clearly show your creditor how much you are actually able to pay until your situation improves. Be realistic don't make a proposal that you will be unable to implement. Often, creditors will agree to negotiate with you since their ultimate goal is to recover the money you owe them.

Your creditors are not legally obliged to make any special arrangements

*** Important! Remember that your creditors are not legally obliged to make any special arrangements with you, nor are they required to abide by them. Their ongoing cooperation is completely voluntary.

When contacting your creditors, you can try to:

  • Have your payments spread out over a longer period, thereby reducing your minimum monthly payment;
  • Negotiate a reduced rate of interest, which should also reduce the amount you have to pay (some credit card issuers offer cards at a reduced rate of interest if ask about them);
  • Obtain a deferral for some payments;
  • Have your total debt reduced (for example, you owe $5000 but you offer to pay $3000 cash right away using money that you may, for example, have received from an income tax refund). If such a proposal is agreed upon, be sure to obtain a written notification of your agreement that indicates the terms (i.e. that your have no outstanding debt due and that your debt is now cleared with this creditor).
You may have your credit revoked

The financial institutions that issued your credit cards may require that you stop using your credit card or may even revoke it. Be flexible and open. You are not in a position to refuse and, in any case, you cannot use your credit card if you have reached your credit limit. By voluntarily suspending the use of your credit cards, you will avoid the temptation to add new debt (on which you may also have to make interest payments). Avoiding the use of a credit card will improve your financial situation and make it easier to stick to your budget.