Should You Talk to Your Creditors?

angry man--creditor callingWritten by Charleston Bankruptcy Lawyer, Russell A. DeMott

One of he most unpleasant parts about having financial problems is the calls from creditors. In my Charleston area practice, clients want to know whether they should talk to their creditors about their financial problems.

Talking to your creditors is usually pointless

If you know you can’t pay your debts, there’s really no point in discussing your financial situation with your creditors. “Maybe they’ll understand?”  No, they won’t. The conversation will go something like this:

You: “I can’t pay you. I lost my job.”

Creditor: “You need to make a payment or we’ll take legal action!”

You: “But I just told you I lost my job!”

Creditor: “Ma’am, if you don’t make a payment, we’ll have to take legal action.”

You get the point. And in many instances, creditors will get downright rude with you.  Many also lie about what they can do to collect (jail, garnishment, etc.) You may as well go talk to the tree in your back yard. In fact, talking to the tree in your back yard will be a much more enjoyable experience.

But I read an article saying that I should immediately contact my creditors if I can’t make payments

That’s true if you’ve hit a little financial speed bump.  If you’ll be late in your credit card payment–maybe you lost a job and got one a few weeks later–sure, call them. In those instances, creditors will work with you. But if it’s impossible to repay the debt and will be for the foreseeable future, there’s no point in discussing your situation with your creditors.

What do I do?

You need a plan, not emotionally painful banter with some knucklehead in a cubicle who’s paid to harass people who aren’t paying on time. If you can’t pay, you need to seek legal advice. That may mean filing bankruptcy, or it may mean taking some other steps to address your financial problems. And if someone needs to communicate with your creditors, it’s better that a lawyer do that on your behalf. The creditor will know you’re serious about dealing with the issue, and, if you are represented by an attorney, any further contact is prohibited under the South Carolina law.

The bottom line is this: If you know you’re in over your head, get professional help. Don’t waste time talking to your creditors. It will save you from endless frustration and misinformation.

About

Russell A. DeMott is a bankruptcy lawyer practicing in the Charleston, South Carolina area. He graduated from the University of South Carolina School of Law in 1993. While in law school, Russ served as a law clerk to Robert F. (“Bob”) Anderson in Columbia. Bob Anderson is a Chapter 7 bankruptcy trustee and, according to Bob, has taught Russ everything he knows.

During his clerkship with Bob Anderson, Russ also worked with fellow SC Bankruptcy Blog member Däna Wilkinson who now practices in Spartanburg, South Carolina. Russ still considers Däna a good friend and mentor. Unbeknownst to Bob Anderson, Russ also learned a lot about bankruptcy law from Däna.

Russ also served as a staff editor and the research editor for The South Carolina Law Review during law school.

For the first two years after law school, Russ clerked for the Honorable Harry A. Beach, circuit court judge in Allegan, Michigan. Russ says of Judge Beach: “Judge Beach was the epitome of an outstanding judge. He had both knowledge and wisdom. He treated lawyers and litigants with respect and always tried to be fair to both sides. It was an honor to have started my career as his law clerk. Judge Beach is now retired, and he is deeply missed on the bench. One attorney friend of mine actually cried during her last hearing before Judge Beach. And I’m sure many others have shed tears since his retirement. ”

For the next ten years, Russ practiced in Michigan in the areas of bankruptcy law, family law, criminal defense, and general litigation. As the years went on, Russ practiced more and more bankruptcy law as he gained an outstanding reputation in that area.

In 2005 Russ moved back to South Carolina to settle in the Summerville area. Russ’s wife grew up in Hanahan, South Carolina and most of his wife's family live in the Charleston area. "That can be both good and bad at the same time," Russ says. He officially declined to comment further about his relationship with his in-laws.

Russ has three daughters, three female cats, and a female dog. He is outnumbered. As Russ puts it, “to borrow a line from Jeff Foxworthy, I’m 'swimming in the estrogen ocean.'”

Russ enjoys the challenge of helping clients with their financial struggles. “I view my bankruptcy practice as a way to level the playing field between ordinary citizens—the voters—and Corporate America—the vote buyers. I’m unapologetically on the side of the little guy.”

Russ helps clients file Chapter 7 and Chapter 13 bankruptcy, as well as out-of-court solutions like negotiating with creditors.

Contact Information:
Russell DeMott, Charleston Area Bankruptcy Lawyer
DeMott Law Firm, P.A.
103 Grandview Drive, Suite B
Summerville, South Carolina 29483
(843) 695-0830
(843) 408-4443 (facsimile)
[email protected]


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