Bankruptcy can be frightening and stressful. Being under a mountain of debt can take a toll on your mental and physical well-being. Having creditors pester you for payments can not only become a hassle, it can stop you from doing even the simplest tasks.
These debts can completely take over your life. Before settling debt, make sure you follow some of the tips listed below:
Check into Credit Counselling: This is number one on the ‘to do’ list. Credit counselling can help you get your life back on track through debt management programs. A counsellor will spend an hour with you going through your financial background. He or she will then help you make a budget to help repay your debts.
The Don’t: Do not opt for just any credit counselling company. Find a reputable credit counselling company that has experienced and professional counsellors.
Try to Negotiate: Negotiate your debts. Call your creditors and try to find a common ground. Some credit card companies, clinics and hospitals are willing to negotiate. When you negotiate with your lenders, you will be able to understand what they expect of you. You will also be able to reduce your debt.
The Don’t: Don’t throw your assets into the fire without understanding what the risks are. See what your lenders are willing to negotiate on. Also accept that you can’t negotiate everything. Things like child support or spousal support cannot be negotiated. It is also important to remember not to be persistent.
If you call one of your lenders and another person picks up the phone, try to see if you can get an alternate number of your lender. If not, this will take patience and time.
Fix Your Spending Habits: Since this is what got you into debt in the first place, make sure you don’t accumulate more debt.
Cut back on the perks. Do you really need 4 different types of cereals? Do you need to go out with your friends every weekend? Is daily takeout falling too expensive?
Save up as much as you can so that you can repay your debts. Look into ways to see how you can save up or ask your debt counsellor for tips and advice. You can even ask people you know how they save up.