Being in debt is a major stressor and can end up causing you all kinds of health-related problems if you don’t take control. Worry over what you owe, creditors calling you all the time, and wondering how to pay everything can take a huge toll on your health. You must take control of the situation now and find a way out of your debt. For those of you who don’t think it’s possible to get out of your present situation, all it takes is a little planning.
You can consult with a Debt Management Organization in order to get your interest rates reduced on your loans and credit cards. They will work with you to help you get your life back to normal. The problem is that they will charge you a fee for these services. Some charge a flat monthly fee and some base the fee on what amounts you owe on the loans you want them to handle for you.
To find a reputable Debt Management Organization, check with family members and friends to see if they have ever used a good one. If so, you will know whom to use. If not, then you must find one yourself. You can check your phone book’s yellow pages for Debt Management Organizations or you can search online for them. Just be extremely cautious about getting one that might land you in worse financial shape than you are already in. Check with the Better Business Bureau once you find a company and make sure they have never had any negative reports.
Your payments may not be reduced significantly by using a Debt Management Company but your interest will be much less. That results in more of what you pay actually being put towards what you owe, which will dramatically reduce the time and money required to finish paying the loan.
If you have some time to devote to your debt management project, you can actually handle everything yourself rather than turning it over to a Debt Management Company. You will need to run all of your credit reports (from the 3 major credit bureaus) to make sure they are accurate. Then, gather all the phone numbers for your creditors.
Before calling your creditors, figure out your monthly expenses and decide exactly what you can afford to pay each creditor. When you call them, have all of your paperwork and figures in front of you. Be friendly and explain your whole situation to them, telling them why you got behind in your payments and what your other expenses are. Explain to them that you would rather pay them a lesser amount each month than not to pay them at all. Work with them and they will usually work with you. They do not want to turn your account over to a credit bureau or agency because they don’t know if they will ever recover their money. They know that there’s much more chance of them getting paid if they work with you. If they won’t agree to what you are asking, then you haven’t lost anything by trying and they will note that you are trying hard to pay them.
Once you have worked out a payment plan you can afford, either by using a Debt Management Company or handling it yourself, you need to educate yourself on finances so that you will never find yourself in this situation again. You can check out books at the library on financial planning or consult a financial counselor. Once you learn to manage your finances wisely, your life will take a turn for the better.
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