Dealing With Debt
Money problems can be overwhelming. If you are having trouble paying your monthly bills or are worried about losing your home or your car, you are not alone. High unemployment and a sluggish economy are causing millions of American consumers to fall behind financially. You may be receiving past due notices from your creditors or perhaps debt collectors are constantly calling you, demanding payment.
There are options available to those individuals who are drowning in debt. If you or someone you know is currently experiencing financial troubles, consider these suggestions: realistic budgeting, credit counseling from a legitimate firm, debt consolidation, debt settlement or bankruptcy. Which option is best for you depends on your specific situation, the amount of debt you owe, and your level of discipline.
Self-Help Guide to Debt
There are certain steps you should take when trying to gain control of your financial situation. Developing a realistic budget should be priority #1. It’s not surprising that most people who find themselves buried in debt very rarely have a budget or know how to make one.
Contact your creditors as soon as possible when you know you are going to have a problem with payments. The sooner, the better.
Know your rights when dealing with debt collection agencies.
Pay special attention to your secured debts. These usually include car loans and mortgages. Make a point to speak with these creditors at the first sign of financial trouble.
Debt Collection
A debt collector is someone who is attempting to get payment from you on a specific delinquent account. The actual creditor may have sold off this debt to the collection agency or the debt collector may be working for the creditor.
If you are behind with your payments, you can expect to be contacted by a debt collector. Federal law requires that you be treated in a fair and respectful manner by any debt collector. Therefore, it is important that you know your legal rights when dealing with a debt collection agency.
Debt Relief Services
Many consumers who find themselves overwhelmed with credit card debt have little hope of ever getting out from under the crushing amount of money they owe. Naturally when they see an ad for a debt relief company, it sounds enticing. And the ads are everywhere- radio, television, the internet.
While these companies promise to erase your debt for pennies on the dollar, this can be a risky undertaking. Your credit report can suffer long-term damage which can make obtaining credit in the future more difficult.
It’s important to research any debt relief company thoroughly. Be certain you read and understand everything before signing any commitment.
Credit Repair
Consumers with poor credit histories are especially vulnerable to fraudulent companies who promise to clean up their credit reports so that they can buy a new car, or get a credit card, or even obtain a mortgage. For an upfront fee, they guarantee to remove all the negative items from a credit report.
The truth is, negative items cannot be removed by anyone from a credit report (unless they are mistakenly put there in which case they can be disputed and removed).
Be alert to these scams and know what to look for and what questions to ask if you are contacted by one of these businesses.
Advance Fee Loans
If you want to apply for a credit card but have a poor credit score, you may be worried that you won’t qualify for any type of new credit.
It’s important to be alert to companies which guarantee loans or credit cards to anyone, regardless of credit history. These advance fee loan businesses charge a fee just for you to apply for a loan- being approved is not guaranteed. More often than not, you are dealing with a scam artist and throwing away money on a bogus application.
Learn the tricks these companies use to lure in unsuspecting consumers.
Car Repossession
It’s said that Americans live in their cars and there is some truth to that. You probably depend on your car to take you everywhere you want and need to go- to work, to the grocery, or to school.
If you fall behind with your car loan payments, the creditor can repossess your car. In certain states, if you do not carry adequate car insurance, your vehicle can also be taken away from you.
Learn what to do if you are having trouble making your car loan payments. It’s easier to speak with your creditor early on to try to resolve the payment issues than to deal with repossession.
