Trouble paying debt

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Debt consolidation loan - Your different options
For many people the lure of easy credit has taken them into the forbidden zone of debt. Between debt on regular credit cards, shopping store credit cards, home equity lines of credit, mortgages and car payments it's no wonder consumers are finding themselves financially and emotionally drained as they float in a sea of debt. At a time like this with debt continuing to mount the decision... Read debt consolidation article



How to Beat Debt
Debt is a Product in America

The #1 sickness in America concerning finances right now is debt. Debt is a product in our culture and it is vigorously aimed at you and me everyday, everywhere. As a society, we borrow more money than the last two generations times two and your online credit report reflects these habits! Some companies like Sears make more profit from their credit departm... Read debt consolidation article



Trouble paying debt
If you find that you are not able to pay your creditors the first thing you need to do is to talk to them. Never avoid them, thinking if they cannot reach you then it does not matter. This will lead them to think that you are avoiding them, and they will take further action to collect the debt. The best route to take is to call the creditor ahead of time and explain your current financial situation if you are having problems making payments. Creditors are usually very helpful, and they will set up an alternative plan so you can make the payment without them reporting a default on your behalf to credit bureaus. On top of talking to them, send a letter to them summarizing your situation. Send it return-receipt so you know they accepted your copy for your further reference. It is also important to pay the debts, such as rent, utilities etc. first. These debts are more important and can affect you immediately. By following the outlined guidelines listed below, you will set up a process to help you overcome your short-term debt.

Important Guidelines to Remember

1. Pay the most important bills first. These include rent, utilities, car loans, and other loans. Other debts can wait for a while.

2. Compare interest rates on the credit cards you own, and pay off the higher ones first. Also look to see which ones will significantly increase if you miss a payment. By paying the cards off with higher interest rates, you will save money in the long run.

3. Talk to your creditors to set up a new plan for paying off your debt. Most creditors will work with you, lowering your monthly payment until you can catch up.

4. Get counseling help if you are having repeated problems. A professional who works with cases similar to yours will always give you new ideas on how to reduce your debt expenses.

5. Debt consolidation. You also have the option of obtaining a loan to consolidate your debt. This is a great help because it will more than likely lower your interest rate, and you will only have one payment to make per month. Be careful though when using a debt consolidation company because you may end up paying a higher interest rate. If you miss even one payment, your interest rate will go through the roof. You will have to put up collateral such as a car or house when you use this method.

6. Try to make as large of a payment as you can to lower your debt. You are going to have to pay high interest for a period of time, but the faster you can get rid of debt, the more money you will save in the future.

7. Contact and join a support group such as Debtors Anonymous to help you cope with debt, and you will also be able to discuss and relate to people with similar problems as yours.

It can seem like a never ending and confusing situation to not be able to pay your bills. Remember not to panic, and seek help. Avoidance is not the key, and you will find trouble by ignoring your creditors.

What Happens if You Can't Pay

If you miss a payment, you will experience increasing pressure from your creditor to pay. The sequence usually starts off with a courtesy letter reminding you to pay, followed by phone calls until you pay. As time passes, and you still can't make the payment, the creditor will turn your account over to a collection agency. The agency is just a third party who purchases your account from the creditor for a certain amount. Collection agencies are usually very demanding, and can be quite rude sometimes. They have been known to make threats and relay false information about what can or will happen if you do not pay them. It is very important that you know your rights and what can and will actually happen if you don't pay the collection agency.

Know Your Rights

While a collection agency will try to get you to pay your debt, you have certain rights that they have to respect or they are liable for legal action against them.

1. Always identify the caller. Write down his or her name, the collection agency they are with, the agency's address, and the exact amount due. Record the date and time of each call too.

2. Always remain calm no matter how the agency's debt collector speaks to you. If they use abusive language against you, record what is said each time. Do not speak the same way to them. If they report that you used abusive language, you do not a have a chance to stand up against them in court.

3. Always dispute your debt in writing well before the 60-day time period they give you is up. If you believe that you do not owe the amount that is being collected against you, write a letter to the agency stating exactly what the problem is and why you think the debt information is false. They will then have to investigate your letter before any measures can be taken against you.

4. If a creditor is harassing you, you have the right to write a letter to them requesting them to stop calling you. Under law, they must stop immediately or they can be sued for harassment. If calls continue, record the date, time, and who you are speaking to for your records. If you choose to take action against the creditor, you can sue for damages and lawyer fees.

Creditor's Options

The sales contract you signed for your credit agreement has the specific information about what the creditor can and will do if you do not pay your bills. If you do not pay your bills your creditor has the option of acceleration. This will make your whole bill due immediately with no payment options. Courts may be able to force you to pay by filing a Writ of Execution against you, which will allow the creditor to take some of your personal property and sell it. The property available to the creditor differs from state to state. A creditor can also repossess the items you bought or the property you put up for collateral.

Court

If you dispute your debt and the creditor still believes its' claim is valid, the creditor will more than likely have a lawyer contact you. You must answer the plaintiff's complaint letter within 20 days stating what you agree or disagree on. If you do not, when the case goes to court, you will automatically have a judgment against you, which may allow the creditor to garnish your wages and take some of your personal property. The creditor has ten years to collect the debt from you, with one more renewable ten-year period.

Other information can be obtained from the Federal Trade Commission:

Federal Trade Commission Division of Credit Practices Pennsylvania Ave. at Sixth St. NW Room 4037 Washington, DC 20580

They will help you by further explaining your rights as a consumer, and by referring you to different counseling agencies located in your state and area, and dedicated to helping you overcome debt.

To avoid the huge mess of going into debt, simply communicate with your creditors, letting them know way ahead of time about financial problems you are or will be having. This will save the huge headache of having to go to court to settle a debt claim, and some embarrassment. It will also help to protect your credit score. A credit report that has default judgments on it will not likely be a report that a lender will be willing to work with. They do not typically stick out their neck for liabilities.

Aaron Ralston is the owner of The Financial Guru at http://www.thefinancialguru.com. His website is dedicated to helping you solve your financial problems by providing you with the free information you need to get your credit straight, make investment decisions, and create your own financial plan.

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Alternatives To Eliminate Debt

You've got some serious debt problems. Take heart in the fact that a lot of people do these days. The key to getting out from under debt is to evaluate the situation you're in, and then to decide if you're willing to do what it takes to change it. Are you going to stop using the mall as your playground? If so then you have a chance to get out of debt without resorting to bankruptcy.

In fact there are many tactics to try before you even think of heading to a bankruptcy lawyer. Here are some important considerations and alternatives to help you avoid bankruptcy. New bankruptcy laws make it more difficult to file than it used to be.

From the period of 1994 to 2004, filing for bankruptcy has doubled. Bankruptcy filing has spun out of control with consumers being targeted with easy credit. This has become a major cause for bankruptcy.

What About The New Bankruptcy Laws?

There is now a new law for bankruptcy that was passed called the "Bankruptcy Abuse Prevention and Consumer Protection Act". People struggling to pay their credit debts are now going to have to deal with this new bankruptcy law.

3 Effective Alternatives To Help Avoid Filing Bankruptcy

1. Contacting creditors is an alternative to bankruptcy. Instead of filing for bankruptcy, you work out payment options with your creditors. In many cases they are very willing to work with you. It's to their advantage to keep you as a customer. The creditors know the alternatives for bankruptcy will bring them more profits if you don't file for bankruptcy.

2. Getting a debt consolidation loan is a good alternative for bankruptcy. Financial services can combine all your debts into one loan payment every month. A consolidation loan as an alternative for bankruptcy, can help pay off debts. For bankruptcy consolidation loans, you can shop online for the best terms and rates. Lenders are very competitive to earn your business online.

3. You may also consider a debt workout for bankruptcy alternatives. With a debt workout, an attorney contacts your creditors and makes arrangements. In most cases the monthly payments will be less than if the credit account was settled in full. For some cases they want the payment in full, but over a longer period of time than originally stated on the credit agreement.

Filing Bankruptcy And How To Find A Good Lawyer

If you have decided there is no alternative to filing bankrupty,you may be asking yourself, "how do I find a good bankruptcy lawyer? The best way to find a good bankruptcy lawyer is through referrals. Family members and friends who filed bankruptcy in the past can refer you to a good bankruptcy lawyer. The yellow pages in a phone book is another great place to find reputable bankruptcy lawyers. Another invaluable place to find a good bankruptcy lawyer and services in on the Internet. When you search for a lawyer, try to find a lawyer that deals with your type of bankruptcy. You can get free advice with the first meeting.

What Will I Need For My Bankruptcy Lawyer?

With your first visit, it's important to bring everything you can on the first consultation. You will need a list of all the creditors and how much you owe for your bankruptcy lawyer to consider. This includes any insurance, medical bills, auto loans, taxes, student loans and any personal loans. Your bankruptcy lawyer can give you the advice you need with this important information. This will make the filing process easier if you do decide to file bankruptcy.

If you're not going to be able to change your behavior enough to get your debts under control, then you may, at some time, have to resort to bankruptcy.

Dean Shainin offers online Bankruptcy and debt advice. For more information, articles, news, tools and valuable resources on bankruptcy and debt solutions, visit this site: www.bankruptcy.deans-knowledgebase.com


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Trouble paying debt
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