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Paying Your Creditors- priority

Financial recovery April 10, 2024

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Paying Your Creditors

If you are contacted by a creditor or debt collector, first make sure you really owe the money they claim.  Every collector must send you a written “validation notice” saying how much money you owe within five days after they first contact you. This notice must include the name of the creditor to whom you owe the money, and how to proceed if you do not think you owe the money.  If you send the debt collector a letter within 30 days stating that you do not owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. But a collector can begin contacting you again if it sends you written verification of the debt, such as a copy of a bill.  Assuming you owe the debt, let us talk about how to handle it.

You may feel pressured by creditors and lenders to pay their bills first. However, you should pay your basic necessities (e.g., mortgage, rent, utilities) before paying other creditors (e.g., credit card companies).

What should you do if you are behind in your bills and cannot make a full or partial payment to your creditor?

Answer: Call your creditors as soon as you know you cannot make a payment. If you avoid their calls, they will only call more frequently. We will discuss ways to negotiate with your creditors later in the module.  

 

Paying Your Creditors

If you are contacted by a creditor or debt collector, first make sure you really owe the money they claim.  Every collector must send you a written “validation notice” saying how much money you owe within five days after they first contact you. This notice must include the name of the creditor to whom you owe the money, and how to proceed if you do not think you owe the money.  If you send the debt collector a letter within 30 days stating that you do not owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. But a collector can begin contacting you again if it sends you written verification of the debt, such as a copy of a bill.  Assuming you owe the debt, let us talk about how to handle it.

You may feel pressured by creditors and lenders to pay their bills first. However, you should pay your basic necessities (e.g., mortgage, rent, utilities) before paying other creditors (e.g., credit card companies).

What should you do if you are behind in your bills and cannot make a full or partial payment to your creditor?

Answer: Call your creditors as soon as you know you cannot make a payment. If you avoid their calls, they will only call more frequently. We will discuss ways to negotiate with your creditors later in the module.  

 

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