Submitted by Jim Herst on Fri, 2007/09/21
How to Keep Your Cool While All Around You Are Burning
Credit is a funny thing. We work to achieve it, process it promptly when we can, and worry about it when we can't pay our bills.
Think about that new car you originally had. A flat tire meant things were not right, requiring immediate action just so you could keep moving.
Surprise! Credit is like that too.
As soon as bill paying becomes a problem it tends to stop forward motion. However in reality, like one flat tire, it's only a percentage of your problem.
Problems are best successfully handled when they're turned into procedures.
Let's start now to fix the problem.
Address the inability to pay by telling your creditor up front, that you can't pay. No other explanation. Don't offer excuses, don't commit to a later pay, don't try to compromise the debt. Instead, work like crazy to generate cash flow. After a month or so such activity take stock of exactly where you are, financially.
If not enough cash exists to pay debts, don't pay any! It is at this juncture you sit down and carefully construct a pro-forma, a single sheet projecting near term (six months) income and expenses. This enables you to see your real situation, based on the prior thirty days experience and projected by your best realistic expectation. It is now that you face the facts: If you have the money, you can pay your debts in full, or offer (only if you can execute) progressive extended payments. If you can't do that, stay firm, pay no one and expect lawsuit(s). These, if ignored could result in judgments. These activities occur while you are still seeking to work to achieve cash flow. And, you are paying no one.
If the process of seeking cash flow works, in near time you can start activating progressive extended payments. If insufficient cash flow is generated, and your pro-forma so showed, one alternate is bankruptcy. There are other alternates. No one wants Bankruptcy; so instead consider engaging services on contingency by a Payables Manager who acts to advise you while dealing creatively as an Authoritative Third Party with your creditors.
Either you change the tire yourself, or you hire an experienced expert, one capable to achieve satisfaction acceptable to you and your creditors.
Make the change yourself, if you really think you can, otherwise consider professional experienced help. It is available.
The moral of this is, one way or another, you keep moving.