Dealing with debt can be frustrating. Several factors can make it difficult to handle. It doesn’t help that there are scams and frauds out there that can cause problems for you.
If you are suffering from debt, here is a short guide on the several issues that you may have to deal with.
The main issue that you have to deal with is how to pay off your debt. There are several things that you need to do to get out of your predicament. For one, you need to know exactly how much you owe and who you owe. Many people forget the exact details of their debt and just keep paying. But it is much better to be aware of what debts you have. This is pretty simple since you just have to list down all your debts. Double-check it with your credit report so that you are sure you didn’t miss anything.
With an accurate idea of what debts you have, it is time to start paying them off. Planning out a debt payment plan involves you choosing which debts you should focus on and budgeting your income so that you can pay everything off. There are several factors to consider. For one, you need to provide minimum payment for all of your debts. This ensures that you don’t receive any late fees that will make future payments more difficult.
You should also choose one debt to pay off first. This is where most of your budget will go to. The idea is to completely pay off one debt, which reduces the strain on your finances. You can use the money you formerly used to pay for that debt to help pay with another debt. This “snowball” method allows for rapid repayment which makes it effective in the long run. Besides paying off your current debts, you should avoid adding more loans to your debt pile.
If you still find it difficult to pay off your debt, then you should consult with credit counseling services. There are several free or low-cost credit counseling services out there so you don’t have to pay any extra fees. Ensure that your credit counselor has accreditation from government bodies so that you know you are getting good advice.
With so many people desperate to pay their debts, some people will inevitably try to take advantage of them. There are several types of scams out there. One of them is the credit repair scam. These companies claim that they will be able to repair your credit but are dragging you down into more trouble.
Some of these companies promise that they can reset your credit history. This sounds like a good idea on paper since that will give you more financial options. But the approach that these companies take is often illegal. For example, they might recommend that when you apply for credit, you use the Social Security number that they provide. These are usually stolen and can land you in trouble.
If you want to be sure that you are being scammed, here are some warning signs to look out for. First, they charge upfront before they do anything for you. Second, they may request that you not contact any credit reporting company, leaving it to them. Finally, they may ask you to lie or give false information on any new debt application you make.
Another issue that you have to deal with is debt collection agencies. Understandably, lenders want you to pay up. If you are a good borrower and pay on time, you should have no problem. But some lenders may feel that you are not going to pay up. When this happens, they often outsource their collection of your debt to collection agencies.
These agencies can be very aggressive in their efforts to make you pay. They contact you constantly through various channels and mean. They may even file a lawsuit against you so that they can collect what you owe. If you feel that they are being too aggressive, then you should contact a debt collection attorney to protect your rights and stop these aggressive tactics. Your lawyer can also help in negotiating a good payment plan so that you can have an easier time.
Being buried under debt is not something that you want to experience. Feeling financially-trapped is not a good experience. Take the time and effort to try to eliminate your debts so that you don’t have debts hanging over your head.