When you find yourself overwhelmed by debt and are unable to meet your monthly financial obligations, the first step in resolving the issues and preventing further problems is to arrange a meeting with your creditors. By taking the initiative in approaching the creditors, rather than waiting for them to come after you for the missed payments, you will be establishing a good relationship. The creditors know that you want to repay your debts and in this way they will try to help you as much as they can.
When you meet with creditors, the first thing you should expect is that they will want their money. That is only natural, since they approved the credit for you based on the fact that you promised to repay. It is best to take a friendly tone and explain the facts of your situation. In most cases, the creditor will be lenient and offer you a grace period in which you don’t have to make any payments or they may lower the interest rates. Lay all your cards on the table and show all your income records so that they are well aware of your inability to pay.
There is another type of meeting with creditors that is involved in bankruptcy proceedings. Thirty days after you file for bankruptcy, you will have to attend such a meeting. At this time, the decisions will be made about what properties you can keep and which ones will become the property of the creditors so that they can sell them in order to redeem the money they lent you. All your assets must be listed. This includes jewelry, vehicles, homes and land that you own – anything of substantial value.
After going over your list of assets, the creditors will then establish exemptions from the bankruptcy. These usually include clothing and furniture and any specialized tools you need in order to work at your job. If a car is a necessity and it is an older model, this could become one of the exempted items.
All of your creditors will be invited to attend the meeting. However, it is rare that they will all show up. the only ones that usually show up for such a meeting are the lenders to whom you owe a lot of money and the loans are secured by collateral. You do have the right to ask questions of the creditors and since this meeting is arranged by the court, both you and the creditors are under oath when answering all questions. A court reporter records all aspects of the meeting so if an issue arises at a later date about what was said or who said what, you only have to request a copy of the minutes of the meeting.