Life is tough, and it’s tougher when circumstances attack. Unemployment, unexpected medical bills, student loan repayments, or accidents can happen at any time, and can cause you to fall behind on your financial obligations. If something like this happens to you, you’ll undoubtedly want to repair your finances before you lose your home or other valuable property. These are the first six things you should do:
1. Look carefully at the cause of your debts. What is really causing your inability to pay your debts? There may be something you can do about that, perhaps take a second job or apply for assistance. Especially in the case of student loans there are many different avenues to acquire government or other assistance. You should also take a look at your spending habits, and make sure there is nothing to fix there.
2. Talk to your creditor. The person in the world to whom your house is the most valuable is you. Your bank doesn’t want your house, they want as much of your money as possible, so they’re often willing to help you with a debt payment plan if you’re upfront about your problems.
3. Pay high interest loans first. Many people, in addition to being behind on mortgage payments are also behind on credit card payments. You should do your best to pay off high interest and overdue balances first. This not only gets you free from the highest interest loans, it gives you and your creditors confidence that you are willing, able, and ready to pay back your loans.
4. Know your rights and your options. If you’re in debt, you have many rights that you may not know about. There is a statue of limitations on debts in many states, and you have protection from creditors unduly harassing you. Check out the FTC’s website for more information, and make sure to read the Fair Debt Collection Act.
5. Find yourself a debt counselor. Most states offer some sort of free debt counseling services. These people can help you navigate the minefield of debt relief. They won’t try to sell you anything (if they do, then they’re not really a counselor), but rather help you set up a payment plan, budget your money, and teach you about the different options you have.
6. Beware of foreclosure scams. They are everywhere, and they are looking for anybody willing to fall for their scheme, particularly people who feel panicked. By all means, do not transfer your property into anybody else’s name. Once they have your signature, you’ve lost your house. Don’t fall for it.
Good luck. Remember that this isn’t life threatening. Go spend some time with your family.
Are you in financial trouble and looking for the best advice? We’re here to provide free, high-quality information to you. Don’t make any deals with your debt collection agency until you’ve educated yourself. We will show you how to find the best debt payment plan for you.