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
- Amount owed
- Account number
- Contact information
- Purpose of the loan
