Tips for negotiating bills and loans

Creditors will often agree to an extended period for repayment (or smaller periodic repayments over a longer time) when people get into difficulties. Here are some tips that may help you when negotiating with a creditor or collection agency:

  • Don't put off contacting creditors you owe money to. Let them know as soon as possible that you are having difficulties meeting your repayments.
  • Work out your budget to ensure that you can afford the repayments you offer. Never agree to pay more than what you can afford as it may be more difficult to renegotiate a payment if you have not honoured an arrangement.
  • Be open and honest with the creditor or debt collector about your other financial commitments.
  • Ask to speak with a manager or supervisor if your request for repayment is refused.
  • If your repayment plan is not accepted, write to the creditor or debt collector, about your situation and explain how much you can afford to pay, and how often. Meanwhile, you should keep making payments at the level you can afford.
  • Ask questions and listen carefully to what's being said to ensure you understand exactly what you're being asked to agree to. Don‚Äôt be pushed to make promises you won't be able to keep. If you have further questions consult a financial counsellor.
  • Once you reach an agreement, if the negotiations are agreed to over the telephone be sure to take the name of the person you have made the arrangement with and the time and date. Ask for the agreement to be confirmed in writing. Then confirm acceptance of the arrangement yourself in writing and keep a copy of your letter.
  • Keep copies of all related paperwork together in a safe place.
  • It is unlawful for a creditor or debt collector to threaten, abuse, harass or misleads you or use any other unfair practices to collect money from you. Report it to the Australian Securities and Investments Commission (ASIC) Telephone: 1300 300 630 (cost of a local call) or visit should this occur.