Past Dues ... and Don'ts
ELIOT WAGONHEIM: If I am a creditor and I hear absolutely nothing from the person who owes me money in response to all of my past due invoices, I am going to assume this person is dodging me.
STEVE LOVEJOY: Just ignoring it, will tell your creditors that you do not care.
ELIOT WAGONHEIM: This person has it, this person just has no interest in paying me.
STEVE LOVEJOY: And if you do not care, then they are likely to use the full extent of the law that they can. They will sue you. If there is a car loan they will come and repossess your car. If you have a mortgage that is secured by your home or home equity line of credit, the creditor has a right to take your house and sell it in order to repay that loan. If they sue you and get a judgment against you, the judgment creditor then can come after that property. It is a bad bad idea to ignore your creditors.
ELIOT WAGONHEIM: If there is an open line of communication, the person owed money will work with the guy who is trying to work with them.
STEVE LOVEJOY: And they would much rather have you call them up and work with them and stay in touch with them as to what is going on.
ELIOT WAGONHEIM: I really want to pay, I just do not have it now, I do not know what to do I got ahead of myself.
STEVE LOVEJOY: You do not want to sound like you are not paying because you do not want to. You want to sound like you are not paying because you cannot.
ELIOT WAGONHEIM: The best strategy for that debtor is to pick up the phone and to say those exact words.
PETER HOLLAND: If they think you might declare bankruptcy or something like that, sometimes they would just rather get paid something rather than get paid nothing.
STEVE LOVEJOY: Many of them will reduce the interest rate, or eliminate interest payments altogether.
PETER HOLLAND: You can negotiate and say I would like to have a lower payment plan.
STEVE LOVEJOY: So, if you have to skip a couple of payments to get back on your feet, if you have to reduce the amount of the monthly payment, a lot of creditors, most creditors will go along with that.
ELIOT WAGONHEIM: As the lawyer, if that is the scenario that is portrayed to me that the debtor is making payments, but he has just has not paid in full, my advice to the client will always be, maybe you should not waste legal fees on this. You got a person here who is trying, let him try.