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Bach Is Your Financial Future.
555 Skokie Blvd Suite 250, Northbrook, IL 60062
PO Box 1285, Northbrook, IL 60062
Contact Us Today!(847) 440-5998
The way that 2020 has unfolded is a far cry from what most of us anticipated when it began. Not only have there been health issues to consider day in and day out, but also scores of businesses and individuals have taken a devastating financial hit. More and more people have either filed for bankruptcy or are considering it, and the relationship between debtors and creditors has become an integral part of many people’s lives.
Traditionally, this relationship has been tumultuous or perceived as such. However, the current reality makes finding some sort of harmonious balance between debtor and creditor a must if everyone is to emerge better off in the long run.
Here are some useful tips that can help.
Many people are getting to the point where bankruptcy seems like the best option as they slip farther and farther behind, so it’s wise to know what you’re getting into. Here’s a quick description of the different types of bankruptcy so you have an idea of what to expect if you are unsure.
Chapter 7 – this type of bankruptcy doesn’t require you to make a repayment plan, but it does require liquidation of any non-exempt assets to repay your debts.
Chapter 11 – this type is often used for larger organizations or people with significant debt and consists of a reorganization plan that enables them to remain active while creditors are being repaid.
Chapter 13 – this type eliminates current debts via a repayment plan that enables you to repay the debt over a three or five year period.
It’s important to note, that each type of bankruptcy will impact your credit to a certain degree and not every single debt may be wiped out completely when you file.
For debtors, perhaps the most important tip to maintain a harmonious relationship with creditors is to acknowledge the debt and meet the situation head-on. Part of the reason many creditors become frustrated is because of debtors that refuse to answer the phone and make the process difficult.
There is a misconception that it’s an “us versus them” fraught relationship where the debtor feels pressured and squeezed, while the creditor feels unfairly portrayed as a type of repo-bogeyman. If you’re a debtor, it’s best to think of a creditor as the entity that is helping you get back on your financial feet. Therefore, your responsibility is to act in good faith to create a repayment plan.
Of course, part of the reason many debtors are reluctant to engage when creditors come calling is due to the predatory reputation some creditors have developed. Previously, we’ve written about the Fair Debt Collection Practices Act (FDCPA), which protects debtors and ensures their rights.
If you owe money, keep in mind that it’s illegal for creditors or debt collectors to:
It makes sense for both debtors and creditors to keep in mind that they both want the same thing. No debtor is happy with financial debt hanging over them, and the vast majority of the time a creditor is happy to work with you to get the debt paid off in the most efficient way possible.
Certainly, let it be known that you’re aware of your rights as the process begins to unfold. Request proof of your debt and don’t agree to make any payments until you verify that all of the numbers are accurate. It’s also a good idea to check to make sure the creditor is authorized to collect debt from you.
Once these details are sorted out, listen to all of the creditor’s ideas for repayment with an open mind to come up with a viable solution. Remember, this is your debt and it may not work out exactly how you’d like it. The key is to make your payments on time moving forward and communicate when needed, and you should be able to focus on a positive future and leave your debt issues behind.
To put 40+ years of combined experience in your corner, call (847) 440-5998 or contact us online today. We can begin with a complimentary, virtual consultation. Please follow us on Facebook and LinkedIn.