Keeping Wolves from the Door

In a chapter on surviving tight times in the Exchange book, Managing Money, here is some of the advice is offered on keeping creditors satisfied when times are tight:

Goodwill is money in the bank.  Anyone with a thick enough skin can stave off creditors indefinitely.  However, while a totally hard-nosed approach may help you survive a crisis, what price will you pay?  If you alienate everyone you buy services and supplies from during tight times, they may refuse to do business with you when the good times arrive.  Even when the creditors are pressing hard, you should strive to salvage some degree of goodwill by treating them in a respectful, business-like manner.

Creditors don’t like surprises.  When you know you are going to have a problem meeting a financial obligation, call the creditor in advance to let him know you’ve got a problem.  This demonstrates that you take your obligations seriously and gives him time to adjust his cash flow projections.  A creditor will be much less conciliatory if he has to call you after your account becomes delinquent.

Promise only what you can deliver.  Creditors will want you to commit to a repayment schedule.  Unless you are really certain about improving prospects in the near future, avoid making specific commitments.  If you fail to meet a new due date, you are going to double a creditor’s frustration.

Less is more.  Try to make small partial payments periodically to all creditors, rather than paying in full the ones that scream the loudest.  Even a trickle of cash will let creditors know your center is still in business and that you are serious about paying your bills.

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