Women & Money: Managing Credit Card Debt Through Negotiation

Open communication key when when handling bills

hefreeman01261Savvy money management skills are a necessity to weather these tough economic times. BlackEnterprise.com has got you covered with our supplement to the magazine’s three-part “Women & Money” series.

Over the next two weeks, we’ll have money management tips and strategies from Harrine Freeman, CEO and owner of H.E. Freeman Enterprises, a credit counseling service.

BlackEnterprise.com: If your credit is in arrears, what are some good tactics when negotiating with creditors?

Harrine Freeman: Negotiating with your creditors is a key factor in ensuring you retain a good relationship with your creditors, and it helps to maintain your credit rating. Here are seven tactics to use when negotiating with creditors:

Be honest about your financial situation and assure your creditors that you want to pay back the debt owed.

Set up payment plans for each creditor for an amount you know that you can afford to pay each month.

If you feel you will make a late payment, contact your creditor immediately to set up payment arrangements.

You can request a financial hardship arrangement if you are unable to pay the minimum monthly payment. You can also ask for a temporary halt of payments, a lower interest rate (rate reduction), or a lower minimum monthly payment. You can request that late or over-the-limit fees be waived during the payment period.

Follow-up all conversations in writing to confirm payment arrangements and all verbal conversations. Request a confirmation letter in writing to confirm the payment arrangement start date, end date, and payment terms.

Once the debt is paid, request that the creditor remove the delinquent debt from your credit report. This will increase your credit score.

If you are unable to get assistance with your delinquent account, ask to speak to a supervisor or call back and ask to speak to one to get assistance.

If you are unable or don’t feel confident negotiating with your creditors, contact a credit counselor to help you with the negotiations.

ACROSS THE WEB
  • Anthony Justice

    Hello Ms. Freeman

    I heard you speaking on the Micahel Baisden show yesterday. It occured to me that I had met you whne we attended Hampton University. I remembered you because your name was unique. You had a freind or roommate named Robin.

    Onto my situation at hand. How does an individual who let their credit lag for over a decade due to divorce and poor financial choices begin to repair their credit. How do you negotiate with debt collectors who purchase your charged off account from the original creditor. Generally speaking, they are unwilling to agree to a payment plan. Second, what happens when you a second or third collector for the same account. Once this coolection action is reported, it is extremely difficult to have removed from your report. Now you have multiple collections and inquiries for the same account which in turn lowers your credit score.

    Thank You in advance for your reply.

    Anthony

  • Anthony Justice

    Hello Ms. Freeman

    I heard you speaking on the Micahel Baisden show yesterday. It occured to me that I had met you whne we attended Hampton University. I remembered you because your name was unique. You had a freind or roommate named Robin.

    Onto my situation at hand. How can an individual, who let their credit lag for over a decade due to divorce and poor financial choices begin to repair their credit? How do you negotiate with debt collectors who purchase your charged off account from the original creditor? Generally speaking, they are unwilling to agree to a payment plan. Second, how can one correct or eliminate duplicate collection actions from a second or third collector for the same account? Once this collection action is reported, it is extremely difficult to have removed from your report. Now you have multiple collections and inquiries for the same account which in turn lowers your credit score.
    It is good to see you have become successful in your endeavors.
    Thank You in advance for your reply.

    Anthony

  • http://www.hefreemanenterprises.com Harrine Freeman

    Hi Anthony, thanks for your feedback.

    To recover from bankruptcy or bad credit you can:
    1) Open a secured credit card that reports the account activity on your credit report
    2) You can use other credit reporting agencies like PRBC that use non-traditional accounts to re-establish your credit history such as cable bills, utility bills and alimony
    3) Pay all of your bills on time – mail payments at least 7 days prior to the due date
    4) Reduce your expenses
    5) Create a budget and stick to it
    6) Buy needs vs. wants and live within your means

    If debt collectors are unwilling to setup a payment plan contact the original creditor to setup a payment plan. If you are unable to setup a plan with either company file a complaint against both companies.

    Based on the Fair Credit Reporting Act multiple companies cannot report on the same account. Only one listing of an account can be reported on your credit report. You have to identify who has a legal right to collect on your account and send payments to that company.

    Chapter 7 or 13 bankruptcy can lower your credit score 100-300 points. It affects your future credit because it will prevent you from getting approved for a loan, line of credit or getting employment.

  • http://cid-9f705c91e3f338ca.spaces.live.com/blog/cns!9F705C91E3F338CA!106.entry B Holiday

    Of course, what a great site and informative posts, I will add a backlink and bookmark this site? Regards,

  • Felicia

    Greetings Ms. Freeman,

    I have some money to pay on my credit cards. I have about 5. I’ve been working hard the past few years to increase my credit rating. I want to know if it would be best to pay off one card entirely or put money toward each to get them down below 50% of my credit limit. Thank you

  • http://www.zimbio.com/fastcredit208511547971/articles/HdOAqJnYGiX/TipsForFastCreditRepair Fast Credit Repair

    I appreciate your info! Thanks!

  • http://www.0interestcreditcards.org Lacy Hunt

    Yes, I agree with the post…keep the comments coming…

  • http://www.debtsettlementlink.com/ Settle Debt

    Negotiations passes off the good will gesture from the side of a debtor, and therefore the creditor has to listen to him. Thus, while negotiating, you should be calm and polite, which really marks a good impression on the person sitting in front of you.