MONEY OBEDIENCE

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Not everyone knows this, but most lending institutions will negotiate with debtors when debtors run into financial troubles. The lender is clearly motivated to do this, since a lender would rather recover the loan in a less than ideal fashion than force the debtor into even deeper financial troubles. If a debtor gets into greater finanical problems the lendor faces an even lower chance of getting paid back what is owed because of borrower default or bankruptcy. If you run into financial difficulties contact your lender as soon as possible and try to negotiate a new payment schedule. You can also try to negotiate terms if you are paying an interest rate that is significantly above the interest rate prevailing in the market place for the type of loan you have.

The service of a debt counselor may come in handy in this process, since debt counselors are trained in negotiating with lenders. If your debt is related to a mortgage, you may want to consider the services of a mortgage counselor, who specializes in restructuring mortgages.

Just so you know, if you have a good bill paying history on your loan or credit cards, lenders will be that much more willing to compromise. So, it's worth the effort to pay on time when you are flush with money so that you have some goodwill in the bank, if and when dollars ever become scarce.