Financial debt can severely affect a person's daily functions or a family's lifestyle. From fears of social embarrassment to suicidal tendencies, living with delinquent debt can be emotionally incapacitating and can severely impact a person's anxiety and depression levels.
Review & Analyze your Credit Report
In order to amend your delinquent credit, you need to review your credit score and account for any unsettled credit card debt. There are multiple companies, such as FreeCreditReport.com, that allow you to easily view your current credit score and credit debt for free. Register for a free online account with a credit score company and download your personal credit report.
Dispute Charges
After downloading your personal credit report, review each and every charge. If there is a specific charge listed that you didn't personally make, contact the credit card company directly and dispute the charge (or charges). If you're going through a divorce or marital separation, question whether or not certain charges were necessary or relevant to your marital situation. Though you may have to sue your expartner for "excessive" charges in a court of law, you can possibly eliminate some of your outstanding credit card debt.
Evaluate and Rank your Debts
If you owe money to multiple companies, determine the level of priority for each outstanding amount of debt. By paying the minimum payment for each delinquent amount of debt, you will not eliminate your debt in a timely fashion. Rank your outstanding debts in accordance to their highest priority level. Your shelter should come first. If your house is in danger of foreclosing, pay your minimum mortgage payment. Without housing, you are less likely to address other financial debts.
Create a Budget
Determine how much you can spend on a daily or weekly basis. Overspending leads to further credit card debt. Establish a financial budget for yourself, and limit the amount of material transactions you incur.
Reduce your Debt
Ask yourself: what steps am I willing to take in order to eradicate my financial debt? Whether you're solely supporting yourself or taking care of a family, you may need to take on a second job to eliminate some of your debt. By acquiring a second income, you can reduce your financial burden in a more timely fashion. Take the profits from your second income and apply the majority of them toward your delinquent debt.
Record your Credit Reductions
Keep a running log of your delinquent debt. Whether you maintain an Excel spreadsheet or keep a hand-written record of your accounted debts, be mindful of your financial arrears and actively seek a method to eventually erase your financial debt. Each time you pay a bill, account for the specific payment transaction in your log. By documenting each transaction, you will expunge some of your debt while keeping track of your total credit card payments each month.
Collection Agency Settlement
Don't hesitate to contact a collection agency. Some companies are willing to take a financial loss as long as you're willing to pay off your delinquent balance. The employees are open to bargaining, and you can often reduce your outstanding credit card balances by conversing with a collection agent.
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