I heard all 4 of these in the past week.  I thought I would share.  Let me know what you think.

1.  Person A was two months behind on his credit card and over the limit.  He was avoiding the phone calls.  When he finally answered and let them know he was a real person, he was offered a deal.  Pay $100 that day and $100 in two weeks and they would waive $78 in fees.  Good deal?

2.  Person B was three months behind on his car payment.  Answered the phone and told the person what was going on in his life and how he was trying to get caught up.  The bank offered him to pay $40 to offset the fees and in return his loan would be brought current and he wouldn’t have to make another payment until next month.  The did add the three payments he was late on to the end of the loan.  Good deal?

3.  Person C was three months behind on her credit card.  She had her conversation with the person on the phone.  She was offered to make a payment of $178 which would bring her current.  On top of that they would waive $90 in fees.  Good deal?

4.  Person D was going on four months behind on her car payment.  She ignored the phone calls.  Never talked to the bank.  Didn’t return any messages.  The day before Thanksgiving there was a knock on her door and her car was on a tow truck.  She had to send all past due payments plus fees via western union.  Then had to fax over information 3 different times.  And then had to pay $120 in cash to pick up the car.  To top it off her ipod is missing.  Good deal?

Is it better to talk to your creditors? I’m feeling like in this environment it is more important than ever.  Right now, they want to work with you because they’re starting to learn some is better than nothing.  Here’s my advice.  Answer the phone.  Be nice and be polite.  Most importantly be a person and tell them your story.  Tell them why you are late and how you truly want to get caught up.  Be sincere and be honest.  Then here’s the best part, ready?  Whatever they offer, count to 3, grit your teeth and slowly say “that’s a lot of money”.  Then don’t say a word.  See what they say.  Remember there is some room for negotiation.  You just might get a better deal than what was offered.

Person C that I mentioned above, answered a call and it was a different credit person than had left them a message.  The credit person that called was short and rude.  So person C, said so and got off the phone.  Person C then called back the credit person that had left her a message and got a better deal.  So don’t get mad or frustrated.  If you are late they are probably passing you around the department.  If you don’t like the person you are talking with either ask for a manager or hang up and call back.  You’ll probably get someone else.

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