Debt Help
Are you having trouble paying your bills? Getting dunning letters from your creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your car? Even your home? If the answer to any of these is “yes” … then you need debt help.
The first step is simply to recognize you genuinely need help with your debts. The problem can seem overwhelming, regardless of whether it developed from an extended period of overspending or from an unexpected crisis - perhaps family, or health, or business related.
It is extremely common for otherwise intelligent, well-meaning people to go into denial instead of seeking professional debt help, or even taking the correct actions to help themselves. This can even lead to even worse overspending, as if to prove there isn’t a problem … whereas of course, the problem just gets more serious.
The second step is to recognize that no matter how overwhelming things might seem, the problems can almost certainly be overcome. Debt help is available from a variety of sources. Your financial situation doesn’t have to go from bad to worse.
Debt Help - Helping Yourself
The first thing you must do, no matter how undisciplined you have been in the past, is to develop a realistic assessment of your true income and your true expenses. The income side is usually easy … even if discouraging. The expenses can be more difficult. Start with the fixed, repeat expenses such as mortgage or rent, insurance payments, car payments. Then, the so-called “discretionary” expenses for clothes, entertainment, clothing. Try to keep track of even the most trivial expenses - occasional lunches out, Starbucks, other small treats … because if you don’t you’re simply fooling yourself.
The aim here from a debt help perspective is to see exactly what’s possible in terms of first meeting your essential expenses - housing, food, health care, insurance, education.
Then … contact your creditors. While it’s tempting to wait … don’t. Recognize the need for debt help, and contact them as soon as there’s a problem developing. Explain why it’s so difficult to make payments. They’ll often be willing to arrange a modified payment plan that is more manageable for you. Don’t wait until your accounts have been given to a debt collector - at this point your creditors have given up on you and the problems are getting deeper.
If you’re already at the point where you’re dealing with debt collectors, at least understand your rights. In the US, the Fair Debt Collection Practices Act is a federal law and it dictates the conditions under which the debt collector must operate … including the hours you can be contacted, who they can and cannot contact with regard to your debt, and more. Debt help here means, making the best of a bad situation as far as collectors go.
Also, take a serious look at how you’re managing your auto and home loan payments. Loans for a car and a mortgage for a house are secured loans … meaning, they are secured by the assets you bought. So the auto company can repossess your car … without even giving you notice. The bank can foreclose on your home, although of course they do have to follow a process and you will be aware. You may be better off selling the car and using the money to pay off the loan … once it’s been repossessed there are a lot of expenses involved in getting it back, which just worsen your situation. And if you have trouble making mortgage payments … talk to the mortgage company immediately. If they believe you’re acting in good faith, the institution will often work with you to reduce or even suspend payments for a limited time. Or some will even change the terms of the mortgage.
If you and the lender can’t work something out, then contact a housing counselling agency. Some of these will offer free debt help to work with you and the lender. You can get recommendations of agencies from your local office of the Department of Housing and Urban Development, or from your local housing authority.
Debt Help - When you need outside help.
When the problems with your debt need outside help, there are still a number of options open to you. Debt help from reputable Credit Counselling organizations is not free, but it is extremely valuable, and will help you in more ways than you probably realize. Among other areas, they’ll be able to advise you on managing your money and debts, on budgeting, and working 1-on-1 with you to develop a plan, known as a Debt management Plan. They can also advise you on the pros and cons of your other options … including Debt Consolidation, Debt negotiation, and even the two different forms of Bankruptcy. While there are advantages in some of these, there are also some significant pitfalls of which to be aware.
You’ll find information on these topics, and more topics associated with Debt Help, filed as articles under the different Category heading on this web site.
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