October 21st, 2005 by Questions

I have read that a proposal may be an option for me. A proposal that is far less than the original balance may be accepted. I understand that I will work with a trustee to create such a proposal. My question is ..can I contact my creditor and explain my situation and expect a similar deal to a proposal. I have no assets and a small disability . I cannot pay my debt off in my life time .If I contacted my creditor and they could only give me a break on interest of a few percentage points for example…that would not do anything for me.Have you heard of any agreements worked out between just the creditor and debtor?


One Response to “proposal”

, A licensed trustee said:

If you are willing and able to do so, there is no reason why you shouldn’t try contacting your creditors to see if they will negotiate new terms for the repayment of your debt. People with one or two creditors are often able to make arrangements to have their interest rate reduced and to change a credit card into a fixed period loan.

Unfortunately, if you have more than a couple of creditors, these deals become unwieldy – it is often too difficult to negotiate with all of the parties and keep track of what terms are acceptable to whom.

An alternative, depending on where you live, might be a credit counseling plan. To use this solution you seek the assistance of a non-profit counselling agency. They work out the payment terms on your behalf and you make a single monthly payment direct to the agency – they then make payments on your behalf to your creditors.

The downside to credit counseling is that it does not provide you with any legal protection and you must repay 100% of your debt over a maximum of 5 years. If you are unable repay 100% of the debt you should be considering either a proposal (as you suggested) or perhaps bankruptcy.

Regardless, you should probably use the links on the side of the page to find a trustee in your area to discuss your situation and options.

Good luck sorting things out – it can be done, but you need to make the call first.

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