Here are some effective tips that have worked for our clients in the
past who where faced with what seemed like insurmountable debts. If you
have a tip you would like to add, please feel free to contact us at anytime.
Review your specific obligations that creditors claim you owe to make
certain you really owe them. If you dispute a debt, first contact the
creditor directly to resolve your questions. If you still have questions
about the debt, contact your state or local consumer protection office
or state Attorney General.
Contact your creditors to let them know you're having difficulty making
your payments. Tell them why you're having trouble- perhaps it's because
you recently lost your job or have unexpected medical bills. Try to
work out an acceptable payment schedule with your creditors. Most are
willing to work with you and will appreciate your honesty and forthrightness.
The Fair Debt Collection Practices Law prohibits a debt collector
from showing what you owe to anyone but your attorney, harassing or
threatening you, using false statements, giving false information about
you to anyone, and misrepresenting the legal status of your debts. Remember
that under other federal laws to collect debts, creditors cannot seize
most government assistance and can only garnish a portion of wages to
collect debts.
Budget your expenses. Create a spending plan that allows you to reduce
your debts. Itemize your necessary expenses (such as housing and health
care) and optional expenses (such as entertainment and vacation travel).
Stick to the plan.
Try to reduce your expenses. Cut out any unnecessary spending such
as eating out and purchasing expensive entertainment. Consider taking
public transportation rather than owning a car. Clip coupons, purchase
generic products at the supermarket, and avoid impulse purchases. Above
all, stop incurring new debt. Consider substituting a debit card for
your credit cards.
Use your savings and other assets to pay down debts. Withdrawing savings
from low-interest accounts to settle high-rate loans usually makes sense.
Selling off a second car not only provides cash but also reduces insurance
and other maintenance expenses.
Look for additional resources from governmental and private sources
for which you may be eligible. Government assistance includes unemployment
compensation. Aid to Families with Dependent Children (AFDC), food stamps,
low-income energy assistance, Medicaid, and Social Security including
disability. Other resources may be available from churches and community
groups. Often these sources are listed in the Yellow Pages of your phone
book.
Budget your expenses. Create a spending plan that allows you to reduce
your debts. Itemize your necessary expenses (such as housing and health
care) and optional expenses (such as entertainment and vacation travel).
Stick to the plan.
Try to reduce your expenses. Cut out any unnecessary spending such
as eating out and purchasing expensive entertainment. Consider taking
public transportation rather than owning a car. Clip coupons, purchase
generic products at the supermarket, and avoid impulse purchases. Above
all, stop incurring new debt. Consider substituting a debit card for
your credit cards.
