Resource Manual

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Dealing with Creditors

When you lose your job, it is important to understand your legal rights and responsibilities regarding the payment of your debts. With proper financial planning, you may work out a lower payment schedule, protect yourself from unscrupulous collection agencies, and keep property and goods you might otherwise lose because of your lowered income.

Some general rules to remember:

1. Tell your creditors (those to whom you owe money) that you have lost your job due to strike or layoff. Try to work out a new payment plan with lower monthly payments. Partial payments without the creditor's approval will not automatically stop collection or negative credit ratings.

2. Don't be afraid to contact the creditor. Waiting until a huge payment is due will just make it harder to solve the problem.

3. Creditors know that it is hard to collect from someone who has no income and few assets. They usually will agree to work out a reasonable payment plan.

4. Working out a payment plan and sticking to it will help your credit rating

5. You have rights under federal and state law.

6. It is unlikely you would be put in jail for not paying a bill. Exceptions to this rule include child support payments and writing bad checks on purpose.

The Credit Union advises our Local that modifications to loan repayment schedules will be reviewed on a case by case basis. They also remind us that it is our member's responsibility to promptly make arrangements for repayment if your loan or other obligation (i.e., child support payment) is being serviced by an automatic payroll deduction.

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