If you have found yourself up to your ears in
debt you might be wondering what
you can do to stop the telephone calls looking for past due payments, get your bills under
control and get your financial life back on track. While many companies offer
debt management plans, you might be able to get your debt under control
on your own.
Here are some things you can do to help yourself out of debt:
Develop a Budget
Gather all of your bills in one location on your kitchen table and sit down with your
partner or spouse and make a list of every one of your creditors and the balances you owe
to each of them. Then make a list of all of your income including interest payments that
you might have access to from your
investments. When you
are listing your debts make sure you include all of your debts even those that may seem
small and not worthy of attention. Every dime you owe should be carefully listed in your plan.
Contact Your Creditors
Unsecured credit bills - These include
credit cards, medical bills
and student loans. If you are having difficulty paying your bills, you want to contact all
of your creditors as quickly as possible. Let them know exactly why you
are having trouble paying your bills and speak to them about possibly reducing monthly
payments to fit into your budget. Most credit card companies and other finance companies
will be willing to work with you if you tell them what the problems are.
Secured credit bills - These include your
home loan and car payments.
As soon as you believe you will have a problem paying car or home payments you should
contact your lender.
- Car payments are much more difficult - If you miss even one payment
they may repossess your automobile with no notice. You may want to look
into the possibility of selling your car before it is repossessed.
- Mortgage companies are accustomed to borrowers having difficulties
and you want to do everything possible to prevent the loss of your home. If your mortgage
company seems unwilling to work with you then you should contact your local HUD (Housing
and Urban Development) office and seek assistance from them.
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Understanding Your Rights and Responsibilities
Make sure that you understand not only your obligations to your creditors but also
your rights as a debtor. Federal Laws protect you from being contacted against your will
at your place of business. You can request your creditor stop contacting you and they
must do that. In addition, there are hours that they are allowed to contact you at home
- and they must adhere to these under the Fair Credit Act.
You want to be as proactive as possible when dealing with creditors.
The Federal Trade Commission - Bureau of Consumer Affairs
has a wealth of resources for you to help educate you on your rights as a consumer.
Don't forget that as a consumer you have the right to request a complete
credit report from all
reporting agencies one time per year. Your credit report can help you when you're sitting
down to develop your own personalized debt management plan.
Related topics: debt management plan,
debt protection laws