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Guidelines for Dealing with Debt

Posted on in Bankruptcy

Every month, people have to pay bills. They can be credit card bills, utility bills, and other bills for education or a house. There can be times when these debts become unmanageable due to factors like personal injury, loss of a job or just overspending. If you are experiencing a financial crisis, then there are certain steps you can take to mitigate any damage.

The first step is to account for how you are spending your money and create a budget you can follow. You may know the monthly bills that you have to pay, but not the other ways that you spend your money. Having a full picture of your spending can allow you to prioritize how you use your money. Saving money on frivolous purchases can allow that money to be used on debts.

Generally, the bills that should be paid off first are the ones with the highest interest rates. It is important to make payments that are more than the monthly minimum. Making the least possible payment will only cover the interest being charged and not take care of the principal.

If you are not able to handle your monthly payments then it is helpful to contact your creditors. Telling them that you are having trouble may result in a modified payment plan which can make debts more manageable. This can also buy you some time before your bills are sent to debt collectors.

If your debts have been sent to a debt collector, then it is important to know your rights. Collectors can not contact you at work or between 9 at night and 8 in the morning. They also can not harass or lie to you to collect your debts. Unfortunately if your mortgage payments or car payments are late then you may get your property repossessed to pay the debts. Filing for bankruptcy can put a stop to losing your stuff. If you are getting notices of foreclosure or other debt collection action, then you should contact an experienced bankruptcy attorney in Arlington Heights today.

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