Managing Consumer Debt
Tips and Suggestions Provided by an Experienced Bankruptcy Lawyer
Many times, people do not realize they have issues managing debt until it is too late. That is because, in many cases, things begin to unravel subtly. You are late with a payment here or there. As a result, your interest rates go up, leading to higher minimum payments that are just a bit out of your price range. So, you begin to have to dip into your savings or take out loans to cover the difference. But, it is okay, because you will pay it back once you get everything under control again. However, before you do, you lose your job, get divorced or suffer a serious injury that leaves you with hospital bills that you cannot afford to pay. Now what?
Tips for Managing Debt with Bad Credit
Even if your credit is not ideal, there are ways of managing your debt that will help you regain control of your finances sooner rather than later:
- Avoid “credit repair” services – These services claim to provide people struggling under the weight of debt with a quick fix to their problems. However, generally, only proper money management and time can repair bad credit. In some cases, credit repair services are scams. They entice victims with the promise of financial relief to lure them in and profit from their suffering. A credit repair service may be fraudulent if it charges an upfront fee, requests you not speak directly with any credit reporting organizations, asks you to dispute information on your credit report that you know to be accurate or suggests you provide false information on a credit application.
- Set up a realistic budget – Analyze your expenses and income. Then, use that information to create a spending plan that enables you to meet all of your debt obligations.
- Attempt to negotiate with creditors – Contact your creditors and request a lower interest rate, a payment plan or, if possible, a lump sum payment that is less than the total amount owed. For bills past due, collection agencies are often willing to accept an amount lower than what you owe to settle and close the file.
- Prioritize your debts – If you have trouble paying all your debts on time each month, make sure to prioritize them in order of importance. Then, make sure that you pay your most essential bills on time and in full. Debts such as rent, mortgage payments, utilities, car payments, unpaid income taxes and student loans should generally take priority.
- Make sure you receive “paid in full” confirmation from your creditors – Once you and your creditor have come to a settlement agreement, which can often involve you paying only a small portion of the debt you owe, make sure the creditor reports the debt as paid. This means that your credit report will show the debt as “paid in full,” “debt satisfied” or “fully paid”.
Free Consumer Debt Consultation with a Washington DC Bankruptcy Lawyer
Do not let your current debt problems decide your future. You still have time to turn things around and regain control of your finances. Even if you do not want to seek relief through the bankruptcy process, Washington DC bankruptcy attorney Kevin D. Judd can help you pursue options for managing debt. He has spent years successfully fighting to protect the rights of people facing financial hardships. Attorney Judd is dedicated to helping individuals and families going through hard times get back on their feet. Please call him if you are concerned you may not be able to afford his services.