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Different Ways Of Dealing With Debt
Www.creditandyou.com
Bills, creditors, debt collectors. Are you yearning for the
days when all you had to worry about was the money in your
piggy bank? If so, you are far from alone. Whether its illness,
loss of a job, or simple overspending, it happens to the best of
us. But that doesn’t mean your financial situation needs to go
from bad to worse.
Steps You Can Take To Regain Control When Finances Get Out Of
Hand...
Developing A Budget: Start by doing a realistic assessment of
how much money comes in and how much your spend. List income
sources, “fixed” expenses (mortgage or rent, car, insurance)
and expenses that vary (entertainment, clothing, recreation).
Don’t leave anything out, no matter how trivial it seems.
Obviously, the necessities are your first priority. Then you
can prioritize the rest. The bottom line Is, that unless
there’s money to cover, you’re going to have to cut back on
spending.
Contacting Your Creditors: Many creditors will work with you if
you let them know you are 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 let them give up on you – get to them before they
resort to collection agency action.
Dealing With Debt Collectors: Nobody wants to deal with the
bill collector – least of all you! But, should it happen, be
sure you know the rules. The Fair Debt Collection Practices Act
is the law that dictates how and when a debt collector may
contact you ...
A debt collector may not call you before 8a.m. or after 9p.m
... or at work if the collector knows that your employer
doesn’t approve of the calls. Collectors may not harass you,
make false statements, or use unfair practices when they try to
collect a debt.
Debt collectors must honor a written request from you to stop
further contact.
Bankruptcy: Personal bankruptcy is generally considered the
debt management tool of last resort because the results are
long-lasting and far-reaching. A bankruptcy stays on your
credit report for 10 years, making it difficult to acquire
credit, buy a home, get life insurance or sometimes even get a
job. Learn more about bankruptcy
On the other hand, bankruptcy is a legal procedure that offers
a fresh start for people who can’t satisfy their debts.
Individuals who follow the bankruptcy rules receive a discharge
or court order that says they do not have to repay certain
debts. There are two primary types of personal bankruptcy:
Chapter 13 bankruptcy allows you, if you have a regular income
and unlimited debt, to keep property, such as a mortgaged house
or car, that you otherwise might lose. In chapter 13, the court
approves a repayment plan that allows you to pay off a default
during a period of three to five years, rather than surrender
any property.
Chapter 7 bankruptcy known as straight bankruptcy, involves
liquidating all assets that are not exempt. Exempt property may
include cars, work-related tools and basic household
furnishings. Some property may be sold by a court-appointed
official (trustee) or turned over to creditors.
NOTE: You can receive a discharge of your debts under Chapter 7
bankruptcy only once every six years.
Both types of bankruptcy may get rid of unsecured debts and
stop foreclosures, repossessions, garnishments utility
shut-offs and debt collection activities. Both also provide
exemptions that allow you to keep certain assets, although
exemption amounts vary.
Personal bankruptcy usually does not erase child support,
alimony, fines, taxes and some student obligations. Also,
unless you have an acceptable plan to catch up on your debt
under Chapter 13, bankruptcy does not allow you to keep
property when your creditor has an unpaid mortgage or lien on
it.
Being burdened by debt is overwhelming and puts you into a
position of great vulnerability. And, clearly, yielding to
bankruptcy is an extreme measure that requires a great deal of
thought. In the last few years, a record number of consumers
have been filing for bankruptcy.
About The Author: To find out more about bankruptcy, how the
most common chapters of bankruptcy work, bankruptcy
terminology, and easy steps anyone can take to repair there
credit report, visit:
http://www.creditandyou.com/dealingwithdebt.html it’s a free
information website!
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