If you are in serious debt or what you consider to be extremely uncomfortable, there are some other options available. This is especially true if your current monthly expenses exceed your monthly income. If you are in this situation, not taking action will cause debt levels to continue to rise.
At this point, you may have begun to receive calls from bill collectors or creditors. Instead of becoming angry, try to be cooperative. Many of these collectors are simply doing their job, and not talking to them can actually hurt you in the long run. When you do speak with them, be sure to have your financial information in order. Here are some things you will want to have to better negotiate the terms that work best for you:
- A detailed list of your current debt
- Your current income
- Other import financial information
During the call, listen carefully, take notes, and ask questions. Often, the collector’s goal will be to reach an amenable arrangement that allows you to pay off your debt based upon your specific circumstance. They often use sophisticated software systems that allow them to make the recommendations for you.
If you find that this process is not going smoothly with the specific employee who works for that creditor, request to work with another representative. If that doesn’t work, you may have to take other steps. For starters, you should know your rights as the consumer.
Your Rights
First and foremost, contrary to populate belief, creditors do not have the right to harass you. The Fair Debt Collection Practices Act of 2006 is a federal law designed to protect you as the consumer. It clearly prohibits creditors from doing the following:
- Using obscene or abusive language
- Making repeated calls with the intent to annoy and harass you
- Making threats to have you arrested
- Contacting you at unusual or inconvenient times and places
- Communicating with third parties with your consent as the debtor
- Threatening violence or other criminal means to harm you, your reputation, or property
Working with a Credit Counselor
Credit counselors can be a valuable resource to help you get out of debt. They are often your last option before filing for bankruptcy. Credit counselors can help you do the following:
- Negotiate more workable terms with your creditors, including reduced payments and partial forgiveness of debt
- Assist with overall debt management and pay down structure
- Help you to establish and live within a specific budget
- Assist you with other general financial planning
Be careful when trying to find a credit counselor. Some credit counselors don’t have your best interest in mind and often are only concerned with generating a fee without getting you any real results. To find a Certified Consumer Credit Counselor, visit the National Foundation for Credit Counseling website.