Knowing that your finances are in trouble can be a troubling time. Sleepless nights, trying to keep the bad news from your loved ones – all of this can lead you into a state of near panic. But as with every other problem in life, a trouble shared is a trouble halved and taking back control of the situation by seeking professional debt help and actually talking to your creditors is the first, important stage of solving your problems.
An informal arrangement is exactly what it says – an agreement between you and your creditor that clarifies the situation on both sides. Your creditor only knows that you owe them money. They don’t know about your financial situation and what may have befallen you to get you into this tangle. The ‘ostrich’ approach to debt management is a sure-fire way of alienating yourself from the people who can help you the most – the creditors. And as most people are facing some sort of financial difficulties at the moment, you will find that your creditors will be far more understanding of your position as long as you talk to them.
By explaining your situation and listening to their position as well, common ground can be found where an agreement to pay off smaller amounts over a longer period of time can be reached. As long as your creditor can see that you are making an effort to establish communication, that you recognise that there is a problem and that you are pro-active with managing the debt situation, then they will be more willing to meet you halfway.
The golden rule though, is once you make an informal agreement, stick to it. If you’re still having problems, keep the lines of communication open and work with your creditors and a professional debt advice service to find a solution. It could mean the difference between surviving the recession and getting out of debt or facing bankruptcy.