When you are puzzled about your debt and thinking about how to pay them in a systematic way, all you need is debt payment plans to take this situation under control.
In this situation, you can go to your creditors and check if they are flexible with coming to an agreement with you. They can offer you some payment plans and arrange debt repayment directly with them.
First, you have to put together an exact budget. After putting together a budget, it will be clear to you that after taking care of your living costs how much amount will be affordable for you to pay the unsecured debts.
If you are not falling back on payments to your creditors, you have to take steps according to your contractual payments. However, if according to your budget, you are not being able to continue with the payments, you need to let that know to your creditors.
Way to Make a Repayment Arrangement
First, you have to contact your creditors by email, letter or phone and let them know that you are struggling to pay the amount you owe to them as you are dealing with a poor financial condition. And also ask them if they can allow you to pay the amount that is affordable for you.
You should send the list of any other debts and a copy of your budget to all of your creditors. With this, you can make them understand your current situation, and to them, it will be clear that you are spending money on your living costs only. They will also come to know that you also owe money to other people and the offer you are asking for is valid.
Your creditors will also get to know the reasons for which you are unable to pay the amount you owe. Situations might include when you are not able to manage your money in a systematic way, you have lost your job or you have increased your living cost. With this, your creditors will also get to know if you are ill or going through a mental issue like depression or stress.
Do not get tense if you have to agree with the amount of payment that is not affordable for you. There are some more debt collection payment plans that can help you.
How Much Amount Should You Offer Your Creditors?
If you want to determine the amount that you should offer your creditors, first, calculate the amount that is left over among your unsecured debt. Examples of unsecured debts include personal loans, credit cards, store cards and overdrafts.
The best possible way to share the money with your creditors is by working on the percentage that you offer to each present creditor. And it depends on the amount that you have to pay for each creditor.
What is Going to Happen When the Creditors Do Not Agree to Your Repayments
You will be able to pay a bit more if you can make a flexible budget. For example, you can try to lower your daily living costs in a smart way. In this way, your creditors will get to know that you are really working on paying your debts off and there is more possibility that they will not add any extra charge and will agree to your repayment plan.
For example, you can reduce your spending on footwear or clothing temporarily to make your budget a bit more realistic. Within three to four months you will be able to catch up your payments and then you can get back to your previous daily spending plan and for the time being, you can manage with the footwear and clothes that you have already.
You will struggle with your daily living costs if you cut down your spending in an unrealistic way. Reduce your spending in a proper way. If there is no way in which you can reduce your spending according to your budget, do not agree with the amount that you cannot afford to pay.
Are the Repayments to Creditors Going to Affect Your Credit Score?
In case you are paying less than the amount that you should pay monthly, it is going to affect your credit ratings. And it will be pretty difficult for you to get further credit.
To bring your account up to date, your creditors are going to contact you by email, post or phone and ask for payments. If you do not care, they will default your account and finish the contract.
If it happens, you can never use that particular credit. Does not matter if it is a store card, credit card or an overdraft. In case it is a personal loan, you are not going to get any further credit from the creditor until you make the full payment for your existing loan. Your credit file will be affected for six years if your creditor records a default on it.
You have to immediately clear any arrears that you have and you must pay all the bills in the required time. These are the only ways to prevent your credit ratings from being poor.