By Sybria White on December 8, 2010
.jpg.aspx) We have all been there. At some time in our life we have had to borrow money from some sort of lender. Whether it be for a home, educational purposes, credit cards or cars, it is inevitable that we will run into debt and the problems that come with it. These problems are often linked to having too much debt. Some indicators of too much debt include: “having trouble paying bills on more than one occasion, receiving continuous notices from creditors, and having one’s accounts being turned over to debt collectors”1. These events are stressful, but it important to remember that you are not alone. Many Americans all over the country, especially in the current economic climate, are in the same situation as you. This article will provide some helpful tips to handle the problems you may face from the crippling problems that come with debt. These tips are provided by the Federal Trade Commission and will help prevent debt and the problems associated with debt.
Helpful Tip #1-Develop a Budget
The quickest way to regain control over your debt is to track your expenses and your income from every source. First, list the expenses that never change from month to month, also known as your fixed expenses. Examples of these expenses include your rent or mortgage, car payments, and insurance premiums. After listing your fixed expenses you should then list expenses like entertainment, clothing expenses, etc. that vary from month to month . Listing your expenses is a helpful way to track your spending pattern. This will help you prioritize your expenses and spend your money more wisely. Developing a budget may seem like a no brainer, but handling your expenses more efficiently to cover just “the basics”, will reduce your dependence outside monetary sources.
Helpful Tip #2-Contact your Creditors
To stop the constant calls it is a good idea to get in contact with creditors, before they give up on you and turn you over to a debt collector. Notifying your creditors that you are having trouble making payments and why, may lead to a more manageable payment plan with a little negotiation. But the first step is notification and perhaps a compromise can be agreed upon in the future.
Helpful Tip #3- Know Your Rights
This tip is especially helpful when dealing with debt collectors. The Fair Debt Collection Practices Act is the federal law that “dictates that a debt collector may not call you before 8 a.m., after 9 p.m., or while you’re at work if the collector knows that your employer doesn’t approve of the calls”. “Collectors may not harass you, lie, or use unfair practices when they try to collect a debt”. And most importantly you should know that, debt collectors must honor a written request from you to stop further contact.
The helpful tips discussed above are just a few self-help options recommended by the Federal Trade Commission. These are minor things you can do now to help your situation. However, your debt and the problems associated with them may be too great for these tips. If this is the case, it is important to note that there are other helpful options for your specific situation. These may include, credit counseling, debt management plans, debt consolidation or even bankruptcy.
Source:
1 http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre19.shtm
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