Debtors Anonymous has a great pamphlet about communicating with creditors. Here is the description:
Communicating with Creditors and Debt Repayment
This combination of two formerly separate pamphlets outlines D.A.’s experience in dealing with creditors and repaying them in a spiritual, recovery based way. Addresses how to work through fears, ask for help, use debt moratoriums, make and keep commitments, and meet your needs as well as those of creditors.
Item #P-130 $1.20
It is an exceptional pamphlet and every DA member should read it for suggestions on how to deal with this most difficult of issues in our program.
I was able to pay off some debts with $20 a month payments, despite the minimum payment being much higher. I also stayed in contact with the creditors. While I know they can sue you if you don’t make the minimum payment, I guess, in my case they figured it was more cost-effective to just accept my payment. This was in the late 1990’s, when I was first in DA and was $22,000 in debt to multiple creditors. Eventually, I was able to make larger payments.
Finally paying that debt off completely was surely a DA miracle. Of course, had I not left DA afterwards, I would most likely not have incurred the $33,000 debt I am currently paying off.
Tip! Some members with multiple debts use a formula, dividing up payments based on the percentage each creditor represented of their total debt. For example, let’s say I have $20 total for debt repayment:
- If I have two creditors, I can divide the money equally in two, so each creditor would receive $10/month.
- I can calculate by percentage how much to give each. If debt #1 is $100 and debt #2 is $50, then debt #1 represents 2/3 of the total debt of $150. Therefore, #1 receives 2/3 of the payment, or $13.33.
Communications is Vital
As painful as it is to keep telling a creditor you cannot pay what you owe again and again, I found it was a great practice in humility and willingness for me to do so. One strategy that may be helpful is agreeing with the nasty collector that you want to pay the debt. The more human you are and the more you find common ground with someone, the more likely they will soften up. And even if they don’t, you are doing your part to live in integrity.
Creditors and collections people are doing their job … which happens to be in conflict with what you are able to do in recovery. If you cannot give someone what they want, running away and not dealing with it only inflames the situation.
Patience and Acceptance are Key
I have practiced patience with customer service people who have not given me what I wanted when a problem came up. Right now, I am in conflict with my old health insurance company about a lab test they refuse to cover that the policy stated it would cover. I will owe over $500 if they won’t cover it. Working with my sponsor, I am just taking the next step in appealing the decision and am not flying into a rage about it at anyone.
So, too, we can turn that patience and acceptance around when we are in default on a debt or loan. It is true that we owe the money. It may be true that we cannot pay even the minimum. Neither of those facts makes us “bad” people … nor does it mean we have to behave in ways we will later regret because we are embarrassed about it.
Our Creditors Do NOT Come First
According to DA Tool #5 – Spending Plan, “The debt payment category guides us in making realistic payment arrangements without depriving ourselves.”
Please reread that over and over until you can accept that your needs come first. Until your spending plan is stable enough where you are not in deprivation with your basic needs and some of your wants (YES, I said some of your wants), you cannot begin a repayment plan.
I’m not suggesting that you buy a winter home and a Porsche, and ignore your creditors. But if you pay your creditors at the expense of food and medical care, this is out of balance.
With the “budget” philosophy, ANY discretionary spending is frowned upon by others. I have seen the judgments of so-called “normal” people when I spent discretionary money abstinently while owing money. My husband comes to mind. For instance, I get massages as part of my spending plan because it is the only thing that helps my body feel better. He thinks it is a ridiculous luxury. Sometimes, I feel really embarrassed about this choice. But when I talk to my sponsor and PRG, I get back into balance about it.
Happily, in program, we are surrounded by people who have gone before us who know that we are still entitled to a life despite having debt.
Maybe we only have $5 in our entertainment category. But at least we have something. The reason we do so is that for people like me, ongoing deprivation leads to spending binges. I have seen it occur over and over in my own life. I need to have balance.
With the help of our sponsor, PRG, and network, we can figure out a sane spending plan that will not leave us in total deprivation and at the same time, if possible, include our debts as one of our categories.
Working with Creditors
This time around (and God willing, there is NOT a next time for me), I became disabled while repaying my debt. I negotiated a hardship minimum payment that was close to $200 less than I had been paying, and I have been paying that amount for nearly three years. However, if I lose my private disability, I will no longer be able to pay.
If you read the pamphlet described at the beginning of this post, it is OK to negotiate a settlement with creditors. While DA has no opinion on bankruptcy, the experience of many shows that it didn’t prevent their getting into debt again. I am one of those as I did go through bankruptcy in 1989.
I don’t intend to go bankrupt, but because of DA H.O.W., I do have enough in savings to work on negotiating a final settlement with my sole creditor. If I can do so and they agree to a reduced amount as the balance, it will be in my best interest financially.
Ideally, I would pay the entire debt back, but if I did so under the circumstances I described, I would put myself into a position of having no savings at all, which would not be well-advised. Remember, we attend to our own needs first. And as someone who is unable to work, wiping out my savings to pay off a debt is a poor decision.
We Are NOT Our Debts
We cannot allow ourselves to be defined by our debts, to permit creditors, collection agents, or our own self-judgment to diminish ourselves. We came into program to learn a new way to co-exist with money that is not destructive.
The issue of debt is an incredibly painful one, but must be brought into the light of clarity along with a realistic spending plan and ongoing reconciliation of our numbers in order to recover from this disease.
From my experience, the reality of communicating with my creditors in honesty and humility is far less frightening than the imagined terror I’m avoiding by ignoring the phone calls and letters. Facing our fears often puts everything in perspective.
As DA Promise #10 state: “We will no longer fear the truth; we will move from hiding in denial to living in reality.” I can tell you from my experience, strength, and hope that this is true. There is nothing about our financial situation, no matter how dire, that is worse than the torture we impose on ourselves when we refuse to face it.
If you are too paralyzed with fear to face your creditors, answer the phone, or even look at your mail:
- Talk to others in program.
- Go to meetings.
- Read stories on the DA website and in Currency of Hope.
- Get a sponsor.
- Get a PRG, even if you don’t feel ready to create your spending plan.
- Book-end one tiny step in the process with another member, such as committing to open one piece of mail from a creditor. Tell the member that you will do this. And call the member back after you have done it to talk about it.
If you have taken the first step, “We admitted we were powerless over debt—that our lives had become unmanageable,” you are already on the path to recovery. And remember, you are not alone. There are members you can turn to for help who have faced and overcome financial adversity equal to, or worse than, yours. As the expression goes, “Together we can do what we can never do alone.”