Some people who recognize they are experiencing difficulties meeting debt payments now or, may in the near future are willing to try and develop repayment arrangements themselves directly with creditors. In many situations people simply need a plan and some guidance on how to do it. This section is for people who choose to use the resources in Crown's Self Directed Credit Coaching Ministry. God bless you on your journey.
Dealing With Creditors Yourself
We suggest there are three basic steps or principles to follow - Communication, a Written Plan and Integrity.
1. Proactive Communication
It is best to run toward your creditors not, away from them. As hard and embarrassing as it may be, always take proactive initiative in keeping your Lenders informed. It is almost impossible to negotiate with a Lender you have ignored. Communicating with a Lender sooner rather than later tells them you are responsible and serious about resolving your situation. Lenders often document each contact you make with them, whether it is by phone, letter, email or fax. The more you communicate, then better. Silence can be deadly.
2. Write and Offer Lenders a Written Plan
Most Creditors respond best to a request that is backed by a written copy of your budget, a list of your debts and, your proposed repayment plan indicating how much you are able to pay each month. It is important to present a realistic and honest plan with a demonstration you are willing to make sacrifices to pay the debt.
3. Act With Integrity
When you communicate with Lenders always be completely honest with yourself and with them. The Bible repeatedly stresses the importance of honesty. Leviticus 19:11 says "You shall not steal nor deal falsely nor, lie to one another". And Proverbs states "The Lord loathes all cheating and dishonesty."
Remember the Lord loves and cares for you. He wants nothing but the best for you, His child. Your honesty gives the Lord maximum freedom to work in the hearts and minds of others such as Lenders on your behalf.
The Self Directed Ministry Process
Step 1: Pray telling God you desire freedom from debts and ask Him to guide you in this process. Then, read 2 Kings 4:1-7 in the Bible to be encouraged by someone who successfully eliminated her debts by placing her trust and faith in God while completing what many would consider a very unual plan.
Step 2: Determine you personal financial picture - a summary of your assets (what you own) and your debts (what you owe). A detailed record of all debts which lists lender name, amount owed, payments required and interest rate will be very useful to determine your repayment proposal.
Step 3: Calculate the percentage or proportion of each individual debt compared to the total debt. These figures will be used to allocate what your proposed payments will be to each Lender.
Step 4: Determine your present actual budget situation. Consider all sources of income and all expenses. Be honest. We cannot emphasize enough the need for self-honesty here. Subsequent decisions and commitments to repay debt are placed in jeopardy if decisions are based on incomplete or inaccurate information.
Step 5: Determine the cash you have available to make all your debt payments.
Step 6: Calculate the payment amounts for each debt by multiplying the percentage of each debt determined in Step 2 by the cash available you calculated in Step 4.
Step 7: Prepare and mail an introductory letter to each Lender along with your first payment based on your calculations. Pray asking God to prepare the Lenders' ears and hearts to be receptive.
Step 8: Make your regular payments as committed to in your letter to Lenders.
Step 9: Begin Snowballing - as the smallest debt is paid off, apply that payment to the next smallest debt. When the next smallest debt is paid off, apply those combined payments to the next smallest debt. Repeating this process will speed up the process of paying off all debts without drawing on any extra cash and, reduce the overall time it takes to become debt free.
Step 10: Read the many articles in the Free Stuff section for encouragement, continually pray and live the best you can within your budget.
We recommend a cover letter similar to the sample below when first communicating with a Lender. The letter should be customized for each Lender and situation. The key is putting something in writing. The introductory letter and other forms are available below and in the Free Stuff section.
I am writing to you about my account # ___________________. I apologize I have been unable to abide by the terms of our credit agreement. I am committed to full repayment of my debt.
Attached you will you find my current budget and list of my debts. As you can see, my debts total $____________ and my monthly payments are $________________. Deducting all living expenses from my present net monthly income after taxes of $__________ leaves me only $_________ to pay toward all my debts.
I have received assistance from a charitable organization in assessing my financial situation to determine what I can afford to pay my Creditors at this time. Enclosed, please find my cheque for $_______. I propose I will be able to pay this amount each month for the next ______ months. Throughout this process, I will be regularly reviewing my finances and increase payments as I am able to do so.
Also, I respectfully request that the interest applied to my account be reduced or cancelled in order for the greatest amount possible of my payment be applied toward principle reduction.
If this proposal is unacceptable, please return the enclosed payment and I invite you to contact me at so I can answer any questions you may have. Thank you in advance for helping me resolve my situation.
No guarantee of co-operation by any or all creditors is implied by Crown to someone following this process. We encourage everyone to be in constant prayer throughout the process and, be prepared for possible resistance and hesitation from creditors. This is an ambitious process but, a very God honouring goal to do whatever you can to eliminate debt. It also honours Lenders to repay what was borrowed from them setting a good Christian example. If for any reason you think you may prefer additional help from Crown, our Moderate and Extensive Credit Coaching Ministries may be for you. Click for more information.
Free Ministry Resources
The following free tools are found in the Free Stuff Section for your use. May the Lord bless you on this journey. Please let us know about your progress.
- Lender Cover Letter
- Blank worksheets including Debt List, Financial Position and Budget Calculator pages
- Sample worksheets to illustrate how the blank worksheets can be used.