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Before applying for debt counseling, you may be able to renegotiate your own repayment terms, like a debt counselor would, with your creditors. Contacting them to renegotiate your debt repayment plan can be daunting, but is easy if you follow a planned process.

Most of your creditors will be willing to work out a mutually agreeable solution whereby they get their money and you don’t get listed as a non-paying client. Working with your creditors benefits them as they don’t have to enter into legal processes and still get their money back.

List Your Debt

First write a detailed list of all your debt and the creditors your are paying. Write the name of the creditor, amount you’re paying each month, interest on the debt, how much is outstanding and if it’s secured or not.

Prioritise Your Debt
You will need to select those that need to be renegotiated and those that you can afford as they are. the debt that has the most severe consequences for defaulted payments should be prioritised above the others. Your list should be in order of high to low priority: bond, rent, car loan, utility bills, taxes, student loan etc. Low priority debt with high interest rate should come first, such as credit cards.

Know the Restructure You Want
This will also require you to come up with a restructure repayment term. Know what you want to ask for before you go in. If they do agree to settle for less, or allow you to extend the repayment term, ask them to remove the bad listing from your credit report. They are not obligated to do this until you’ve paid the debt, but it’s worth asking for.

Provide Documentation
Some creditors will want to see some documentation proving that you need restructuring, so gather this before you start. Provide your household budget, list of your debt, list of your assets and their values as well as copies of your loan agreements.

Surety
The creditor may ask for someone to stand surety. This means if you default on a payment, they claim it from the surety. Have someone you can trust ready to do this for you. Make sure they understand the risk and divulge the information you’ve given to the creditors to them too.

Whatever agreement you and your creditors come to, make sure it’s in writing so no one lists you unjustly. This means putting on to paper the duration of the repayment, the deadlines, the amounts, the interest and the penalties.