Negotiation Tips

Negotiation skills are very important in all areas of life particularly when dealing with finances. Too often when working with the household accounts negotiations do not take place until too late. This occurs for many reasons including the fear of hearing the word "No". It is too easy to place the bills in a drawer until you can afford to pay them but less easy to pay them in lump sums to avoid further action and additional costs.

To negotiate successfully it is important to be aware of several points:

When is the bill due?
If negotiations are left until after the due date, the creditor is less likely to want to negotiate. In many cases, the creditor may not have the authority to extend the account any further and disconnections or legal action will take place.

To avoid difficulties, negotiate the account as soon as it is delivered before the due date. Creditors will normally happily place extensions on an account if the payments are paid over a reasonable time and as close to the due date as possible.

Make sure that you can maintain the payments
If the payments are offered in desperation and are higher than you can afford, you will probably miss payments. It is important to work out all of the money you will need to spend over the next few pays so you can still put petrol in the car and buy food.

If you make arrangements and miss them creditors will disconnect your utilities or pursue a default and begin debt collection action. This will incur late fees and additional fees for collection and legal costs.

Maintain contact with the Creditor
If you keep in contact with the creditor regularly, they are more understanding and less likely to take further action. Creditors note on the files if no contact is made and the record remains for several years. If you have regularly avoided contact until the payments are overdue and due for further action, creditors are not as willing to negotiate.

To avoid difficulties in the future consider the following options for paying accounts on time:

B-Pay
Most accounts can be paid using B-Pay over the phone once you have set up an account. Look on the bill for the B-Pay sign. Be aware that your bank or credit union charges a fee for this service.

Centrepay
Centrepay allows you to have a small amount taken regularly out of your Centrelink benefits to prepay towards a wide variety of accounts including utilities and rent. Ask your local Centrelink office for details.

Direct Debits
Direct debits are available through your bank. Nominated amounts can be sent directly to many creditors if you have the correct details. This will incur a fee.

Direct Transfer
Direct Transfer is available through your bank. Direct transfers are similar to Direct Debits and may incur a fee.

Post Office Payments
Most accounts can be paid through the Post Office. You do not need a current account to make part payments towards an account. The Post Office can log your payment if they have the barcode or account number from an old account. Make sure that the account you are using is one with your current address.

Easy Pay
Easypay is available through Centrelink to pay South Australian Housing Trust Rental.

Pay more than needed
If you maintain regular payments and pay a little more than needed, this will be credited towards the next account and assist you to avoid late payment fees.

If you are having problems paying a credit contract (loan or rental purchase) or a pawn-broker, see a free financial counsellor for advice.