Contacting my creditors

• Contact your creditors
• Where to start when contacting creditors
• Contacting creditors personally
• Contacting creditors through a professional

Contacting my creditors, but where do I start?

By reviewing your budget, you will be able to see if reducing the monthly payment for a single debt is enough to get your finances in order. If so, it won't be necessary to contact all of your creditors. However, if a payment reduction from just one creditor doesn't quite get your head above water, you could choose to contact all of the creditors to whom you owe the largest amounts of money. This will have a greater impact on your monthly budget.

For greater peace of mind, you could choose the creditors to contact who have already contacted you asking to be paid. For more information on relevant practices in this area, refer to the section on collection agencies.

Start with essential debts

If your review reveals that you owe money for essential services (telephone, hydro, heat, rent, etc.) you could start by paying off these debts first so that you and your family avoid possible service cuts or loss of your home. If you are faced with excessive debt, the option of making arrangements may not be adequate, especially if some of your creditors are unwilling to enter into an agreement with you (which is within their right). You would then need to try some of the other options.

Who qualifies?

Any consumer who is having difficulty meeting financial obligations may try this option. The key is to take action as soon as possible before the situation gets any worse.

However, this option is most suitable for people who usually make most or all of their required payments, but are temporarily having difficulties with their finances.

Ideally, your total debt load and the number of creditors you owe money to should not be excessive. Otherwise, no creditor will take you seriously.

Which debts are eligible?

You can try to make new payment arrangements for all types of debts except mortgages, although even these may sometimes be eligible depending on the financial institution and on your financial situation. Under certain circumstances (a job loss, for example), some financial institutions currently offer a mortgage payment relief period of up to six months (deferred payment of principal).

You can exclude certain creditors if you wish - it is up to you. If negotiating with only one creditor provides you with the leeway you need, you don't have to work out an agreement with the others. However, if you are dealing with a debt management program advisor, you should let them know about all of your debts. They will usually check into your situation and find out where you stand. It is best to be completely honest about your financial circumstances.