Seven Tips to Handle Debt Problems

[Jan 22, 2010.]

 

Plenty of Americans have needed to face up to growing problems with debt during the past two years, problems compounded by job losses, furloughs, pay cuts, rising health costs, increased housing payments or increased interest rates on credit cards. Last year, the National Foundation for Credit Counseling said that more than 13 million people owed money to collection agencies or were considering bankruptcy.

The immediate instinct of most people in financial trouble is to hope the problem resolves itself, but facing reality is by far the better way to handle the problem and find a solution. While there are a variety of potential solutions, sometimes a payday loan can be a worthwhile short term way to meet your debt obligations.

The following tips (from Forbes.com's "Money Builder" column) can lead the way to a better year:

• Know where you stand. Add up your income and any assets, then add up your monthly bills. Track your spending on things like restaurant meals and movies. If your income doesn't match your spending, then you'll need to make some changes such as taking on a second job or slashing your discretionary spending.
• Negotiate with creditors. Talk to your bank or credit card company, if possible even before you are behind on your bills to see if they can help you find a solution.
• Know who you're talking with. When a debt collector calls your home, find out if they work for the bank or for an agency to see who you are dealing with.
• Only do deals you can live with. Only accept an arrangement you can afford. If the bank won't lower your payments ask to have a lower interest rate or drop penalties.
• Make sure your information is accurate. Confirm that all of your payment history is correct, that the bank has credited all your payments. Keep a written record of all calls.
• Know your rights. Debt collectors cannot threaten you or call outside of specific hours. The Federal Trade Commission (FTC) publishes a list of consumer's rights.
• Avoid desperate measures. An advance on your credit card or a title loan against your car can be extremely costly. Some payday loans can be expensive, but searching online at Rebuild.org can help you find a reputable company for a quick payday loan with the best terms.

While long-term solutions such as paying down your debt, decreasing your spending, or finding a way to increase your income make the most sense, a short-term payday loan can help ease debt collection while you negotiate your future.

 

About Author:

Michele Lerner is a freelance writer with twenty years of experience writing articles and web content for newspapers and magazines on topics related to real estate, personal finance, and business.