Summer 2009 | Volume 107 | Number 652
Getting a Break
When things are tough, some creditors compromise.
Cable or your cell phone: Which would you rather give up? Probably neither. But when money is tight and bills are mounting, we're faced with tough choices – and often the stakes are higher than losing your cable service. Do you pay your mortgage or schedule that surgery? Make a car payment or have the refrigerator repaired? Any extra expense can feel like a step closer to insolvency. But reprieve is available if you know where to seek it.
Credit card companies and service providers frequently offer hardship programs, which allow customers who lose a job, become ill or suffer a setback to rework their payment terms, says Jill Aleshire, senior vice president and director of consumer banking at Thrivent Financial Bank. Even if your hardship isn't official, she says, "sometimes all it takes is a strategically placed phone call to get you a break on interest rates, monthly charges and more."
These days, with threats of default, bankruptcy and foreclosure looming, creditors are increasingly open to negotiation. They would rather see some -return on their investment than risk losing it all. Service providers are feeling the heat, too. As hard-up customers skip payments, cut services and close accounts, the pressure to retain customers is generating some appealing deals.
Tips On Negotiating
- Gather information before you contact a lender or service provider, so you know your options and have a sense of what others have received.
- Have an idea of the outcome you want, with best- and worst-case scenarios.
- Keep in mind that you do not have to accept the first offer.
- Be prepared to explain why you need to renegotiate, but do not go into detail. ("I lost my job," "I've been ill" or "I'm about to file for bankruptcy" are sufficient reasons.)
- Be prepared to back up any claims you make (e.g., with medical records, bank statements or a letter of termination confirming a job loss).
- Remain friendly, calm and levelheaded even if you do not like the response you are getting.
- Don't be shy about asking to speak with a manager, a supervisor or someone further up the ladder.
- Set terms you'll be able to meet – and then be sure to meet them.
- Keep clear records with the time, date and name of anyone you talk to.
- Get any agreements in writing.
– N.W.
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