Resolving debt issues is a stressful and frustrating experience even when it's done right. Managing your credit and spending is the best way to avoid the need for debt relief. When you're struggling with overcoming your debt debt, a number of resources are available. Following a few simple guidelines when pursuing debt relief helps you learn from your mistakes and can keep a difficult situation from worsening.
Contact Creditors
Do contact your creditors to negotiate your debt. Creditors may agree to lower interest rates or defer payment to help make payments more manageable. It's best to do this as soon as you face trouble paying your bills.Credit card companies may be willing to work with you to settle debts later, but resolving the situation early helps to avoid fees, penalties and the harassment of debt collectors.
Credit Counseling
Do use a credit counselor if you need help with your finances. A counselor might be able to help you work out a payment plan with creditors and develop a budget to make sure you can meet monthly payment obligations. Credit counselors provide advice on strategies to reduce debt including ways to avoid potential penalties or common mistakes that can be prove costly. Look for accredited and reputable credit counselors who provide free information and offer fee information in writing.
Advance Fees
Don't pay an advance fee for debt relief. If a debt relief service does charge a fee for its services, get that information in writing before agreeing to work with them. Under federal law, it is illegal for a debt relief or counseling agency to charge any fees to a consumer before they have worked out a payment plan with the consumer's creditors. Do not pay a debt relief service until after they have successfully negotiated debts with a creditor. Report violators to your state's office of the attorney general and to your local Better Business Bureau.
Bankruptcy Filing
Don't assume bankruptcy is the only way out for severe debt. Bankruptcy can have a very negative effect on your credit and result in the forced sale of your personal property. You may be able to resolve a debt problem without the need for bankruptcy protection. Before considering bankruptcy, contact your creditors, seek professional help and enlist the help of your family, if possible. Personal bankruptcy is an action of last resort.
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