The stress of past due bills can make a person want to bury their head in the sand. But ignoring past due bills won't make things any better, in fact, it will only make it worse. I won't lie, dealing with creditors isn't always easy and sometimes you have few options. But there are things you can and should try to do when trying to address your past due bills.
Thoughts From A Former Collection Call Agent
During my 13 years in the energy industry, I had many opportunities to make collection calls to both business and individuals who had past due bills. Most collection agents aren't out for blood but they are representing the interest of the company for which they work (or have been hired) and their job is to secure past due monies.
While I didn't make calls day in and day out, it is a tiresome job to hear the same stories over and over from people about why they cannot pay their bills. One of the hardest parts of being a good collection agent is having discernment and wisdom to know who is lying and who is telling the truth. While it may surprise you, many people do lie about job loss, divorce, and even family death to avoid late fees and shut offs.
The best thing you can do when addressing your past due bills is be honest with those you're working with. But let's back up a bit. Waiting to talk to a collection agent isn't the best choice. Let's look at my top tips for dealing with past due bills.
Dealing with Past Due Bills
#5 – Ask for A Fee Reduction
Past due bills result in late fees and finances charges. When you're upfront with your creditors about your circumstances and call them before they call you, don't be shy about asking for a fee reduction. I have heard from clients that creditors will waive late fees and interest charges when the bill is up to date.
Insider Tip: Don't make this a habit. Many adjustments are one time only and your account will be noted. Use this to your advantage the first time you call but know that they likely will not waive fees again.
#4 – Prioritize Past Due Bills
Regardless of fees or interest the most important priorities when you're in a financial jam are:
Especially if you have a family, these five things are the most important. If others things need to fall behind, so be it but these things are the highest priority. Yes, sometimes past due bills are inevitable, your job is to work on the most important ones first. Will this affect your credit score, yes it will? But if you have more past due bills than you can manage, worrying about your credit score is a low priority.
*Insider Tip: Don't be afraid of your mortgage company. If you have not reached the point of foreclosure, they may work with you as you attempt to catch up.
#3 – Negotiate
Negotiation of past due bills comes in two forms: negotiating total amount due and negotiating a pay-off schedule.
Trying to reduce the total amount you owe a creditor is not the easiest thing to do, especially if you're paying a business directly for goods or services you purchased from them. If they delivered a tank of oil to you and you used it, you owe it. Pretty simple. Most businesses are less likely to negotiate down the overall amount due.
**Insider Tip: Be wary of debt reduction companies, you will almost always pay a fee to use their services. You can pay off your own debts little by little by living within your means and budgeting wisely.
#2 – Don't Make Them Chase You
As humbling as it is, the best thing you can do is face the fact that you're past due head on. If you have past due bills, call the creditors before they call you. Even if the bill isn't late but you know it will be, contact the company and let them know.
When you initiate the conversation it put tensions at ease and shows that you are not ignoring the issue but actively addressing it.
Insider Tip: There's a difference between working with a company's credit department and a collection agency. The company department will likely give you more help. Once your debt is with a collection agency the process is harder.
#1 Make Creating A Budget Part of Your Plan
The number one way to address past due bills is to live within your means and assign every dollar a job. Having a solid budget will help you pay off past due bills and lessen your chances of falling behind again. As a budget coach, I helped hundreds of people create a budget, set goals and thrive in their finances. Find out more about the budget coaching program here.
Insider Tip: Creditors like to know you're thinking about them so share your budget plan. Not the whole down-to-the-penny budget but let them know that your two or three-month budget includes x-dollars dedicated to paying them.
You can get a handle on your past due bills. Remember, there is no quick fix. With hard work and a solid plan, you can get out of debt. Our family has been where you are. Let me help you handle your past due bills and steward well the resources God has given you.