Debt: Most of us have some debt. We use our credit cards and fully intend to make payments. However, sometimes things don’t go as planned. Something happens in our life that makes it impossible for us to fulfill our payment commitment. If you’re in debt and can’t make your payments, don’t panic and ignore it!
Ignoring your creditors may seem like the smart thing to do, after all you can’t pay them, but in reality, it’s not a good option. That’s because your creditors could report you to the credit bureau and that could affect many areas of your life. It may mean you are being turned down for a job you applied for. It may mean that you have to pay more for insurance or that you are denied insurance. It could mean you were turned down for a rental property. Simply put, doing nothing is not taking care of yourself.
Instead, sit down and start putting together a list of your creditors that includes both secured and unsecured debt. You can start by talking to them if you want and explaining your situation and why you can’t pay. Some of them may work for you while others may not.
You’ll need to prioritize your debts so you can decide which ones you’ll try to pay off with your limited funds. For example, paying your mortgage and utilities would be more important than paying your credit cards, because you could be left homeless with no electricity or gas. On the other hand, if your situation is serious, you can move away from home. In that case, you’ll still want to keep the utilities happy, since you’ll always need utilities.
The debt collection agency is calling
It won’t be long before you hear from the debt collection agency, which is a third-party agency that buys unpaid debts from other companies and then tries to recover some of the amount. They can really cause chaos in your life if you don’t know what steps to take to prevent it.
How you should deal with debt collection agencies
They will call you in the morning, at noon and at night and at all the numbers where they think they can reach you. Tell them not to call and only contact you in writing. Know your rights under the ‘Fair Debt Collection Agency Act’ and make sure you understand the statute of limitations. The problem of dealing directly with debt agencies to determine a settlement leaves you with no one to protect your rights and care for you. It’s not a smart move.
What are your options?
The best option would be to contact a professional organization that has the ability to challenge, dispute, and remove damages caused by a debt collection agency. Or, you could try to repair your credit on your own if you have the time and know how. Honestly, you’re better off leaving something as important as your credit score to the professionals.
