When you hear the term creditor, what comes to mind? Debt, pesky and pushy are common synonyms that Canadians associate with creditors. However, learning the proper techniques to handling creditors can make all the difference. Understanding your financial position, proper negotiation tactics with individual creditors, and seeking court intervention when necessary are three steps to leaning how to properly deal with creditors.
Understand Your Financial Situation
The first way to learn how to deal with creditors is to understand your specific financial situation. If you have minimal knowledge about your financial situation, it will be increasingly more difficult to efficiently work with creditors to come up with repayment plans, interest rates and other applicable items. Take the time to analyze your current debt sources, including all installment loans and credit cards. This will give you a working knowledge to rely on when it comes time to negotiate with creditors or devise a plan to pay back the amounts owed. If you are feeling overwhelmed with your financial situation, reach out to Faber Inc, who can work alongside you to put together a list of your financial situation.
Negotiate With Individual Creditors
Another way to deal with creditors is to employ negotiation skills. When your debt burden becomes overwhelming, it will be critical to negotiate with each individual creditor to uncover favorable deals, helping you pay down your debt quicker. Be sure you are in contact with creditors and not debt collection agencies. Often times debt collection agencies don’t have the full scope of power that your creditors do. Many creditors, such as a credit card company, will be more likely to work out a repayment plan with lower interest rates or an extended time period compared to the risk of not collecting any funds from you at all. Remain civil, open to negotiation and willing to compromise when dealing with these creditors.
Seek Court Intervention
When all else fails, it may be time to seek court intervention. Once you declare bankruptcy in Canada, debt collectors are no longer able to contact you (Grant Thornton). Filing for bankruptcy does not mean all of your debts are automatically discharged. Instead, the court will decide on what you can easily afford and may set up a payment schedule with you. Creditors with secured debt may ask for the asset back, such as a car. Court intervention is the right move for many Canadians that have an overbearing debt burden that they can’t afford and are unable to properly deal with creditors.
Learning how to deal with creditors is a tricky task for many Canadians, especially when the debt burden is overbearing and stressful. However, understanding your financial situation, proper negotiation tactics and knowing when to seek court intervention are three viable steps for dealing with creditors. To help you through any of these steps are the experts at Faber Inc, who understand that dealing with creditors is a difficult task. Reach out to one of our team members today to schedule a consultation that dives deep into tactics personalized to you when it comes to creditors.
Grant Thornton. “How bankruptcies work in Canada.” Grant Thornton, 2022, https://gtdebtsolutions.com/bankruptcy/how-bankruptcies-work-in-canada/#:~:text=What%20happens%20to%20my%20debt,mortgage%20or%20motor%20vehicle%20loan. Accessed 16 April 2022.