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Ways To Handle Overwhelming Debt:
Now And In The Future |
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Whenever you are having financial difficulties that may make it hard to pay your credit
accounts on time, it is always a good idea to contact your creditors and let them know so
that, perhaps, you may make payment arrangements suitable to you both. Otherwise, your
creditors may have no other choice but to assume that you either forgot or just did not
care to make the payments-obviously not what you intended. If you don't contact them and
simply pay less than the minimum payments, your creditors will still consider your account
past due, and most likely impose penalties that will make it even harder for you to keep up.
Another idea for heading off future credit problems may be to contact the National
Foundation for Consumer Credit (NFCC). The NFCC provides low-cost debt counseling,
financial education, budgeting assistance and other financial services for consumers.
Should you find yourself in serious financial straits, they also offer what are called
Debt Management Plans. A Debt Management Plan can offer a systematic way to pay down
outstanding debt in situations where no other alternative exists, barring bankruptcy.
It works by allowing the NFCC to pay a predetermined amount to your creditors every month.
You pay the NFCC and they, in turn, pay your creditors. Often, the credit counselors can
negotiate for lower rates or fees, to help you get out of debt faster.
The positive aspect of such a plan is that your bills will eventually be paid down and
you will be virtually free of any more contact with your creditors. The possibly negative
aspect is that going into such a plan usually means that you will not be paying your debts
as originally agreed with the lenders. Credit grantors are likely to report such accounts
differently than accounts paid as agreed, which can damage your credit standing. It's better
than a slew of delinquencies and charge-offs or, worse, a bankruptcy, but it isn't an
easy way out, either. You will need to discuss the pros and cons with a credit counselor.
To locate an office nearby, check the NFCC web site at
http://www.nfcc.org or call toll-free 1-800-388-2227 for 24-hour automated office listings.
For more helpful information on how to build or rebuild credit, you may wish to
visit our web site at www.creditmatters.com/channels/buildcdt.asp.
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