How to Discuss a Financial Emergency with Creditors
Financial emergencies can happen to anyone, even people with the best-laid plans. Whether you’re dealing with a medical crisis, a loss of income or another difficult situation, be sure to make your creditors aware of the financial hardship you’re facing. Here are six tips to help you succeed.
1. Make a list of your creditors and their contact information.
It’s helpful to have one central location for the names, phone numbers and email addresses of whom you owe money. Do your very best to contact these creditors before missing any payments. Missed payments can result in late fees, a damaged credit score and other challenges.
If you have loans with UW Credit Union, contact us as soon as possible by calling 608.232.5000 or 800.533.6773, ext. 2828. We’ll help you determine what’s best for your situation—and how to proceed.
2. Remain calm.
You’re not the first person to face a financial hardship, and there’s no shame in asking for help. Be ready to provide a brief explanation of your financial situation and what led to your present difficulties. Practicing this conversation with a friend beforehand may help you feel at ease when you contact your creditors.
3. Be honest and realistic.
Don’t exaggerate or understate what is going on. Be as straightforward as you can and emphasize that you want to make things right. Also make sure not to post-date checks or correspondence.
In addition to being clear and honest, resist the urge to make big promises. Instead, opt for conservative time frames and small steps toward resolution. Financial hardships can be unpredictable, so it’s better to set expectations low while showing your creditors that your motivation to repay them is high.
4. Note who you spoke with and what they said.
Keep a record of which creditors you’ve contacted, when you contacted them, who you talked to and what they told you. You may need to refer to this information when speaking with others or when filling out paperwork.
5. Touch base regularly.
Maintain contact with your creditors until the issue has been resolved. If you’re not sure what to say when checking in, consider asking your creditors if they need anything else from you.
6. Explore resources.
You don’t have to go it alone when financial difficulties strike. Instead of tapping your retirement fund or racking up credit card debt, see who can lend a hand. These resources are good places to start.
A credit counselor can help you make a plan for addressing debt and other financial issues. UW Credit Union members have free, confidential access to credit counselors and online tools from GreenPath Financial Wellness, a nonprofit organization designed to assist people who are facing financial difficulties.
With help from these resources, you may discover strategies for avoiding bankruptcy and ways to lower your loans’ interest rates, monthly payments or both.
Financial hardship programs
If you have credit card debt, you may be eligible for a hardship program offered by your card’s issuer. Call your card’s customer service phone number for assistance, and keep making payments until you’ve confirmed program details and eligibility.
Payment plans and bundling opportunities
Hospitals and utility providers (water, gas, electric, etc.) may be able to offer you an affordable monthly payment plan until your situation improves. Contact their customer service departments for specifics.
Also get in touch with internet, cable TV and phone service providers, as well as streaming services such as Netflix and Hulu. You may be able to save money by bundling some of these services. You might even be offered a payment plan or discount.