20 Jan Helping Us Help You: Resolving Credit Issues
Farmers sometimes find themselves in a Catch-22 situation. They need to obtain supplies or equipment to get crops in the ground, but there’s a problem — they don’t currently have the operating capital to cover those expenses. A loan from USDA Farm Service Agency or other lender can help fill that gap, and the loan officer will work with the farmer to determine a workable loan and payment amount, but there may still be a problem: the farmer has outstanding debts that must be addressed to qualify for the loan.
Old debts can be intimidating, especially if a number of creditors are involved. It may seem painful and insurmountable. Some debts may be so old they’ve been sold to a collection agency that tried for several years to extract payment. While the farmer may have “forgotten” about those old accounts, credit rating businesses have a long memory and that history informs a decision by the loan officer about whether they can help get you through this gap.
Mediators with the Agricultural Mediation Programs can help you work with creditors to come up with a payment plan that will work for you. During an initial meeting or phone call, the mediator will explain the process and what information they will need, but you can help ensure success by taking the following steps:
Make a list of relevant outstanding debts. The loan officer has probably already identified which debts are preventing you from getting a loan. These are the ones the mediator will focus on.
Pull together as much information as you can about each debt:
Name of the creditor
Purpose of the loan
Develop a budget. You need to know the total amount you can afford to pay each month. The total budget, including payments on old loans, needs to be realistic for the loan officer to approve a new loan, to ensure you don’t fall behind in payments again. If you don’t have a budget, the mediator can help walk you through this process.
Often these old debts can be resolved in one or more phone calls with you, the mediator and the creditor on the line at the same time. Together, and only after you authorize the creditor to speak with the mediator, you can explore possible payment or settlement options. You always remain in control of any decision made about your finances or payment plans.
Armed with the knowledge of what you can pay, and with the help of a trained mediator, you can set up a plan to resolve old debts and get back to doing what you do best: growing food for all of us.