Dealing with Debt

Having trouble paying your bills? Receiving notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car? You’re not alone.

Many people face a financial crisis at some point in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn’t have to go from bad to worse.

If you or someone you know is in financial hot water, consider these options:

  • Self-help
  • Debt relief services
  • Debt consolidation
  • Bankruptcy

How do you know which will work best for you? It depends on your level of debt, your level of discipline, and your prospects for the future.

Debt Collection

If you are behind in paying your bills, you can expect to hear from a debt collector. A debt collector is someone, other than the creditor, who regularly collects debts owed to someone else. Lawyers who collect debts on a regular basis are considered debt collectors, too.

Debt Relief Services

If you’ve maxed out your credit cards and don’t know how you’re going to pay off your debts, you may think that a company that promises to erase the debt for pennies on the dollar is the answer to your prayers. Not true! Debt negotiation can be risky, and it can have serious, long-term consequences for your credit report and your ability to get credit in the future.

Credit Repair

Every day, companies target people who have poor credit histories with promises to clean up their credit reports so they can get a car loan, a home mortgage, insurance, or even a job – after paying a fee for the service. The truth is that no one can remove accurate negative information from your credit report. It's illegal.

Advance Fee Loans

If you’re looking for a loan or credit card but don’t think you’ll qualify – or if you’ve been turned down by a financial institution because of your credit history – you may be tempted by ads and websites that guarantee loans or credit cards, regardless of your credit history. Should you apply, you’ll likely find out that you have to pay a fee just for the promise of the loan.

It’s best to ignore these ads or sites. If you have to pay a fee for the promise of a loan or credit card, you’re dealing with a scam artist. More than likely, you’ll get just an application for a credit card, a stored value or debit card, or a card that has so many strings attached, it’s practically worthless.

Vehicle Repossession

If you’re like most people, you rely on your vehicle to get you where you need to go – and when you need to go – whether it’s to work, school, the grocery store, or the soccer field. But if you’re late with your car payments, or in some states, if you don’t have adequate auto insurance, your vehicle could be taken away from you.

Money Matters: Tips from the Federal Trade Commission 


 

Self-Help Debt Relief Services