Taking Action on Your Debt and Dealing with Creditors

When we are deep in debt problems we don’t like to take action and speak with our creditors. But at some point we are going to have to. Avoiding them is not wise and one of them could file a lawsuit in civil court and make you face them. Take action by coming up with a strategy to deal with your creditors. Be courageous and don’t run from them. Here are a few strategy tips:

Take action by figuring out who owns your debt. A credit card company will typically keep your account open for 180 days after the last payment. In other words, if you make a payment today and no further payments then 180 days from today the account will be closed and the debt written off. This does not mean you are in the clear. The debt is then sold for pennies on the dollar (at a discount) to a collection agency. This is why it is so important to pull your credit report because it will show who owns your collection accounts. It is also not uncommon that your debt will get sold to one collection agency and then that agency will sell it again to another. It’s called junk debt and it is a business with a life of its own.

Take action and figure out what you can afford to pay each creditor. Take all the steps required to come up with a budget. Figure out your priority debts like the house and car payment. The last debts on the list are those of your unsecured creditors and you will have to divide up what is left so all can get paid. Write letters and tell the unsecured creditors what you will be paying them each month. If you are not sure how to write these letters, find some samples from the internet.

Take action and follow through with your proposals. Don’t get your hopes up too high. More than likely when you tell the credit card company how much you are going to pay, they will reject it. But then again, they don’t have much choice if this all you have. You will still get the phone calls. You will still get the collection letters. You may even get sued. But the important thing is that you are trying to pay them back. When you make payment proposals, make sure you follow through and maintain the payments. If something changes, let them know. Don’t be surprised if they do not respond back to you. Think about it. If they openly accepted everyone’s reduced payment proposals, they could not continue to charge the rates they do. If an unsecured creditor files a lawsuit on you, at least you can show the judge that you are trying.

Take action and get a more powerful player involved. If you really want to pay back your unsecured creditors but they won’t deal with you, check into the services of a credit counseling agency with a debt management plan. The credit counseling services have a network relationship with many credit card and other lenders and they are experts in negotiating reduced payments and interest rates. In return, you will send one payment each month into your debt management plan and the credit counseling agency will distribute it among the different creditors.

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