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Are You Deep in Debt?


Self Help Measures for Anyone Deep in Debt

Are you having trouble paying your bills? Are you getting dunning notices from creditors on a regular basis? Do you have debt collectors calling your home? Are you worried about losing your home or your car having your car repossessed?

Unfortunately, you' re not alone. Many people face a financial crisis some time during their lives. Whether your financial crisis is caused by personal or family illness, the loss of a job, or spending too much money, it might seem like an impossible problem to overcome. But you can rise above it. Your financial situation doesn't have to go from bad to worse.

If you or someone you know is in financial trouble, here are some self help options you can try:

Create a Budget:

The first step you should take to get control of your financial situation is to create a budget. Start out by doing a realistic assessment of how much money you earn, and how much money you spend. Make a listing of your income from all sources. Then, list your "fixed" expenses - those that are the same each month - such as mortgage payments or rent, car payments, and insurance premiums. Next, list the expenses that vary - like entertainment, recreation, and clothing.

Writing down all your expenses, even those that seem insignificant, is a good way to track your spending patterns, identify necessary expenses, and prioritize the rest. The goal is to make sure you can make ends meet on the basics: housing, food, health care, insurance, and education.

Your local public library and bookstores have a massive amount of information about budgeting and money management techniques. In addition, computer software programs can be useful tools for developing and maintaining a budget, balancing your checkbook, and creating plans to save money and pay down your debt.

Managing Your Loans:

Debts can be unsecured or secured. Secured debts are usually tied to an asset, like your car for a car loan, or your house for a mortgage. Unsecured debts are not tied to any asset, and include most credit card debt, medical bills, signature loans, and debts for other types of services.

Most automobile financing agreements allow a creditor to repossess your car any time you're in default. No notice is required. If your car is repossessed, you may have to pay the balance due on the loan, as well as any towing or storage costs, to get it back. If you can't do this, the creditor may sell the car.

If you see default approaching, you may be better off selling the car yourself and paying off the debt. That way, you'll avoid the added costs of repossession and a negative entry on your credit report.

If you fall behind on your mortgage, contact your lender immediately to avoid foreclosure. Most lenders are willing to work with you if they believe you're acting in good faith and the situation is temporary.

Some lenders may reduce or suspend your payments for a short time. However, when you resume regular payments, you may have to pay an additional amount toward the past due total. Other lenders may agree to change the terms of the mortgage by extending the repayment period to reduce the monthly debt. Ask whether additional fees would be assessed for these changes, and calculate how much they total in the long term.

If you and your lender cannot work out a plan, contact a housing counseling agency. Some agencies limit their counseling services to homeowners with FHA mortgages, but many offer free help to any homeowner who' s having trouble making mortgage payments. Be sure to call the local office of the Department of Housing and Urban Development or the housing authority in your state, city, or county for help in finding a legitimate housing counseling agency near you.

Managing Your Credit Card Debt

If you find yourself falling behind in your credit card payments, contact your creditors immediately. 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 wait until your accounts have been turned over to a debt collector. At that point, your creditors have already given up on you.

Debt Collectors:

Federal law dictates how and when debt collectors may contact you. According to the Fair Debt Collection Practices Act, a debt collector may not call you before 8 a.m. or after 9 p.m. The law also specifies that a debt collector may not call you at work if the collector knows that your employer doesn't approve of the calls.

Collectors may not lie, harass you, or use unfair practices when they try to collect a debt. Also, they must honor a written request from you to stop further contact.

In Conclusion:

If you find yourself heading for serious financial difficulty, set up a manageable budget plan and stick to it. If you aren't sure how to create one, visit your local library or bookstore. When you find yourself falling behind in your bills, call your creditors! Often times you can avoid repossession, foreclosures and credit problems by letting your lenders know why you are having difficulty paying your bills, and when you expect to be back on track. Also, seek out debt counseling or find a debt relif company.

GuideToDebtHelp.com can help you find ways to reduce your monthly debt, and avoid bankruptcy!

Follow these self help measures for managing your out of control debt, and you should be back on financial safe ground before you know it.

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