Proper Handling of Debt Problems

Having debt problems with your creditors might give you so many difficulties and anxiety. You may need to face their constant calls and the pressure or demand to make a payment.

Here are few “workarounds” which may help you deal with all these troubles.

> Your rights – Legally, creditors are entitled to contact you to collect unpaid debts. They can send demand letters, calls or pay you a home visit. But creditors are expected to act within the law when collecting debts you may owe them.

Generally, most creditors abide by rules, but there are unavoidable circumstances which may lead the situation to go off-hand. It is important to know before you avail of any loan/s, make it clear in case default on payment happens. Terms and conditions are important to be read before signing any loan. Great communication is the key.

> Which of the debts you need to pay first – There are more than a handful of expenses that needs to be covered each month that it can become burdensome in your pocket, and you will end up having difficulties on which to take care of first.

Classify the heaviest to tackle: Mortgage or secured loans, Rent, Taxes, Child maintenance, miscellaneous expense, Utility bills, food, and transportation. It’s important that you pay your priorities in full each month. It’s also important that you make an arrangement to clear any priority arrears as soon as possible.

> Pay off or reduce your debt – How? A surprisingly common question we’re asked is how to pay off my debts and make payments to creditors. Sometimes this isn’t as straightforward as it should be.

If you’re finding it difficult to make payments to your creditors, seek help from a professional financial adviser. He/she should be able to provide you with legal and practical ways of dealing with your creditors, and how to settle your debt/s.

> Writing off your debt – There are extreme cases or situations that will make your creditors write off your debt/s. You may yourself in this situation if, you were permanently unable to work, or you have a terminal illness. If you find yourself in a vulnerable situation, it may be worth asking creditors to write off your debts rather than keep contacting you to ask for money you don’t have. If proven that you don’t have the capacity to pay, creditors may be able to consider your extreme situation and grant you to write off your debt.

> Recognizing who you owe money from – If you can’t find any information about your debts from your credit files, then your only option is to wait for creditors contact you. They will use your last known address or address on your credit file. Some people deliberately avoid repaying debts or contacting creditors, in the hope that the debts go away/creditors give up. This will make your situation worse as you risk further action against you, and your debts could keep going up.

Author: Michael Welter

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