| Unless
one is cautious it is normal for people to overspend. There may also be a case
of some unforeseen expenditure due to an illness or loss of job that leads to
a financial crisis. It may appear to be a difficult situation that has all the
making of getting out of hand. But it is in your hand to stop it from worsening.
Depending upon the level of debt, your future prospects and financial discipline
you may look at the following option and decide which suits you the best. -
strict budgeting
- debt
consolidation or restructuring
- credit
counseling from a reputed consultant
Bankruptcy is the ultimate option
if nothing else seems workable. Self help is managing your finances in a way that
your expenditure is always less that what you earn. Preparing a budget is the
best way of doing it. Make out a list of your earnings from all sources.
There
are certain fixed expenses that you cannot avoid like mortgage payments, insurance,
car payments, rent. After that there are expenses that come under necessities
but are variable. The third are what you indulge in only when you can spare some
money for them.
Howsoever
insignificant it may seem make a list of all expenses and try to understand your
spending patterns. Your basic effort should be to meet necessary expenses like
food, insurance, health care, housing and education and then prioritize the rest.
If you find it a bit difficult you may look up some books or a computer
software program to learn more about balancing income and expenditure in a way
that you can save and also bring down your debt.
Creditors have a threshold
level of tolerance and you must always keep that in mind. Do not let matters reach
a level that a creditor gives up on you and hand over your file to a debt collector.
If you have trouble meeting payment schedules do not close your eyes like the
proverbial pigeon that closes eyes on seeing a cat approaching.
Meet the
situation head on and contact creditors and talk things over. Most of the times,
they will agree to rescheduling and modifying payments to bring them to manageable
levels.
How to deal with Debt Collectors
There
is a federal law called The Fair Debt Collection Practices Act that governs debt
collection. Provisions of the Act prescribe that a debt collector may not call:
-
Before 8 am
- After 9 pm.
- At your workplace if the ender knows that your
employer objects to them. Debt
collectors are also barred from harassing, lying or using unfair practices to
collect debt. In addition, collectors have to accede to a written request from
you to desist from further contact. Next
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