Can I make informal payment plans?

     Once you have secured a copy of your credit report and know who you owe and how much, you may be able to set up a plan to pay out that debt without having to go to Bankruptcy Court.  In setting up this plan, you can allocate portions of your disposable income to your various creditors and figure out how long it will take to pay them off.  One of the things that I advise clients to consider is offering one or more of his creditors a lump sum payment. Now this will only work if you have some disposable money available. Creditors will generally not set up a payment plan on a reduced balances.  However, if you are successful in getting your creditors to agree to a payment plan, maybe at a reduced balance or not, you should confirm the terms of that plan in writing.   If you do manage to secure an equitable repayment plan, make sure that part of your agreement to pay provides that any negative credit references that appear on your report, be removed upon completion of paying your obligations.

If you do enter into a payment plan, do your best to stick to it.

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