Resolution: Manage Debt
Over the next few days, we will be sharing tips to help you stick to some of the most common New Year’s resolutions that we make every year. Today we’re sharing tips on how to get out of debt.
Do you want to take control of your debt in 2012? Many people face a financial crisis at some time in their lives because of personal or family illness, the loss of a job, or overspending. It can seem overwhelming, but debt can often be overcome.
There is no such thing as a quick and easy way to get out of debt. Turning to a business that offers help in solving debt problems may seem like a reasonable solution when your bills become unmanageable. But before you do business with any company, check it out with your state Attorney General, local consumer protection agency, and the Better Business Bureau.
The good news is that there are realistic steps that you can take to get your debt under control.
Develop a Budget
Do a realistic assessment of how much money you take in, and how much money you spend. Start by listing your income from all sources, then, write down all your expenses, even those that seem insignificant. This will help you track your spending, identify necessary expenses, and prioritize the rest. The goal is to make sure you can make ends meet on the basics: housing, food, health care, insurance, and education.
Contact Your Creditors
Contact your creditors immediately if you’re having trouble making ends meet. Tell them why it’s difficult for you, and try to work out a modified payment plan that reduces your payments to a more manageable level. Don’t wait until your accounts have been turned over to a debt collector. At that point, your creditors have given up on you.
Deal with Debt Collectors
The Fair Debt Collection Practices Act is the federal law that dictates how and when a debt collector may contact you. A debt collector may not call you before 8 a.m., after 9 p.m., or while you’re at work if the collector knows that your employer doesn’t approve of the calls. Collectors may not harass you, lie, or use unfair practices when they try to collect a debt. And they must honor a written request from you to stop further contact.
Manage Your Car and Home Loans
If you stop making payments, lenders can repossess your car or foreclose on your house.