Debt Help – Getting The Assistance You Need

An elderly couple are depicted meeting with their financial advisor
Managing & Paying Down Debt
Part 1 American Debt – An Overview
Part 2 Types Of Debt
Part 3 Debt Management – Doing It Yourself
Part 4 Debt Help – Getting The Assistance You Need

Part of managing debt is contacting creditors to let them know of the situation. Explain why you cannot make the full payment and try to come to an arrangement where you pay a reduced sum each month or get the interest suspended. Creditors want to get their money and will often be reasonable as long as you commit to paying off the debt as soon as possible. In this article we shall look at:

  • How to deal with collection agencies
  • Getting in touch with mortgage lender
  • Getting the help you need with your debt
  • Being aware of loan scams

Dealing with collection agencies

There are laws that debt collectors must obey so if you are being hassled by a collection agency it is important to be aware of what they can and cannot do. Debt collectors must not contact you between 9.00 pm and 8.00 am. And, they must not contact you whilst you are at your place of employment if you have advised them that your employer does not like it.

A debt that is secured is more important than one that is unsecured

A debt collector must not lie or use unfair practices such as threats of court action and if you write to them asking them to desist they must honor the request. Some collection agencies prefer to intimidate people who owe money rather than take out expensive court actions but the law prevents them from causing undue distress.

Contacting a mortgage lender

A debt that is secured is more important than one that is unsecured. Your home loan is going to be secured on your house and if you stop making payments there is a risk that the property will eventually be repossessed.

Therefore, making contact with your lender is most important. Most are willing to compromise on the level of payments or they may allow you a payment holiday. However, be aware that a payment holiday means that the total amount owed will increase if interest payments are not suspended.

An elderly couple meet a professional to discuss financial affairs

Another option is to increase the term of the mortgage so that the monthly payments are lower. If this helps you to get back on your financial feet and keep your home safe it is an option worth considering.

Getting help with debt

If you cannot imagine being able to deal with debt by yourself there are lots of agencies for debt help. Credit counseling organizations that are approved by the Attorney General will help you to manage your money and they will also advise you about how to contact creditors and make a deal.

Do not approach any debt relief agency unless it is licensed to work in the state. Many debt relief companies advertise their services but they will take commission and your debt will take longer to disappear. Only non profit making agencies that make no charges should be approached.

Many debt relief companies advertise their services but they will take commission and your debt will take longer to disappear.

In addition to providing assistance on managing and paying down debts, a debt counselor will also advise you about all the options that are on the table. A serious debt problem could mean enrolling in a debt management plan. In this case you pay an agency a sum of money each month and the agency uses the funds to pay off unsecured debts such as credit card bills or a student loan.

A debt management plan is not for everyone and should only be considered upon the advice of a debt counselor. Do not confuse debt management with a debt settlement program which is offered by companies that make a profit for their services.

Beware of loan scams

There are also many scams in operation in the US where companies are advertising that you only need to pay a percentage of your full debt. These are not realistic offers and can end up with you paying out a lot of money for nothing.

The final solution to a severe debt problem is to apply for bankruptcy. This has long lasting consequences and should always be a last resort. Bankruptcy stays on your credit file for ten years and can stop you getting any kind of credit in the future.

A young is meeting with a credit counselor

Fees charged for filing a bankruptcy run into many hundreds of dollars and there will also be attorney’s fees to be paid. The most important fact to consider is not just the immediate state of affairs but also your financial future.

Credit counseling services can be found in credit unions, some religious organizations and there are local state organizations. Only use a credit counseling service that has the approval of the National Foundation of Credit Counseling or the Financial Counseling Association of America.

Summary for getting debt help

Getting into debt is not the end of the world. Many families go through this situation and come out the other end. Often they are poorer but they are also wiser. It is important to face up to financial problem so never pretend that debt does not exist. The sooner the problem is faced the sooner there will be a resolution.

Managing & Paying Down Debt
Part 1 American Debt – An Overview
Part 2 Types Of Debt
Part 3 Debt Management – Doing It Yourself
Part 4 Debt Help – Getting The Assistance You Need

About the author

David Warren

David Warren is an expert on personal loans across the United States. His career in banking has helped make David the loans specialist that he is today. He shares his analysis and insight into the personal finance industry on onlinecreditusa.com