What to do if You are Having Money Problems Because of Debt
If you are having money problems due to over use or misuse of credit, there are a few things you can do to get back on track and try to make things better. Some people don't use their credit wisely and before you know it, they are having major money problems. It can simply be a lack of planning on their part and not being organized with their records and overspending.
Often, things aren't too bad until someone loses a job, or perhaps their health fails. Sometimes a crisis can cause a lot of trouble. Regardless of the reasons, when you are in trouble with money, it is problematic.
How can you know you are having trouble with money?
Basically, if you are working all the overtime hours you can get a hold of, and/or have two jobs to try to help, and you still can't pay your bills, then you are having significant money problems. Whatever you do, don't give up or get down about things, because you need to focus on making things better and they definitely can get better for you. Don't assume bankruptcy is the only answer by any means. Generally, bankruptcy helps those that have assets, whether business or real estate that they want to protect.
General tips for help with money problems
If your money problems are consumer credit related, and you don't own a home or business, you may fare a little better to avoid bankruptcy. There are years of damaged credit that goes with that, if nothing else.
4 Steps to help get past money problems:
1. First, understand that you are in trouble financially. No one can help you if you don't even see there is a problem in the first place.
2. Cut back as much as you can on spending money. This is critical to turning things around.
3. Consider negotiating your debts, and working with your creditors. This isn't a fun idea, but its effective in helping people in the long run.
4. Pay back your debts, as soon as you can and as steady as you can.
*Below, I go into a bit more detail on these things.
* One of the first things you have to do if you haven't done so already, is to make a budget. You need to take stock of the current financial situation, no matter how bad it may be. To help get you started, gather up your bills, and check stubs which will help in the making of lists. Figure out net income, versus your expenses that are fixed, like mortgage or rent, transportation needs, and student debt. Since part of the problem is that your outgoing money exceeds what you are bringing in, you need to find places to cut back.
* Work on paying your debts as soon as possible. Some suggest going after one debt at a time, and then eliminating them all as you can. Don't ignore the others, and pay all your minimum amounts. Just make sure that if you have any bit left over, to focus on one until its paid off.
* Contact your creditors and ask them to work with you. The goal of the phone call to them, is to let them know you are wanting to take care of things, and need some help in getting things modified a bit so that your monthly payments are more manageable. Ask them for help with making the account current so that your credit score isn't completely shot.
* Ask for your accounts to be Re-aged. This is line some with the other in that the account is no longer shown as past due, but current. This gets a rather bad mark off your account.
* It may help to find out when the company reports accounts past due to the credit bureau. Some do it after 30 days, but some don't until 60 days, etc. You may have a little wiggle room to adjust things accordingly, to have less accounts paid on late.
* If creditors do call you, there is some information you don't want to give to them. You probably don't want to share where you work, or give out any banking account information either. If you are put on the spot to give information that you really don't want to give, don't get into debate mode with them. Just say that you decline to comment on that.
* Know what the statute of limitations is for your state and any states that you have lived in when you incurred the debt. After an amount of time, the ability to legally sue you for your debts ends, though they will still try to collect it. Your delinquency on paying will show up for about 7 years. After the statute of limitations runs out, they can't collect the money from you.
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