Every person struggling in debts has a different situation in paying off their dues with their creditors. Try the following steps here. This will dig you out as it will apply to most of the creditors.

Keep your financial situation in the highest priority. This will take time, energy and perfect management but the results will be definite.

1. Make a folder with the list of all your creditors and enter the following information.

• The bills.
• Keep a record of the dates and amounts paid on each bill in the past.
• Keep a log file regarding every attempt you make to pay the debts with your creditors. This must include date and time, name and title of the person contacted, nature of contact (whether you spoke on the phone or left a message on their voicemail) and a brief summary of the conversation.

2. Keep a different list of all creditors you owe money to. This will include the name of the lender, the amount due, the interest rate and the minimum monthly payment.

3. Determine the sources of your monthly income after deducting tax and your bare bone living expenses. Your concern should be to keep your expenses lower than income to allow saving each month. Don’t include your debts in your list of expenses. Include amounts that you need to put aside each month to make quarterly or annual payments, such as insurance and taxes. Always keep something extra so that you can cover any expenses that you may have forgotten to write down earlier. The difference between your total income and total expenses is to be used as the portion for making payments towards your debts.

4. Now estimate how much you can pay to each lender.

5. Contact each of your creditors, explain your situation. Make yourself easy and apologize for the late payments and try in every way to convince that you have every intention of paying your debts, but were unable to come up with the full amount at this time. Therefore, you need to work out arrangements. Make sure that all agreements, negotiations and offers are placed in writing.

6. If you find yourself in a situation where you mostly have credit card debts or dept stores and they all are unsecured debts and you are battling zero in your attempts to deal with those lenders, you may take some professional help of local consumer credit counseling in your area. Most companies don’t charge any fees for the consultation, so it doesn’t hurt to talk and discuss your situation. They will offer their advice that might sound beneficial in your situation.

7. Most of the CCCS are funded by the credit card companies. These CCCS companies will help by getting the collection agencies off your back, and negotiating repayment schedules that you can afford. Be aware that these programs will show up in your credit report. If your credit is already tarnished, it wouldn’t really matter using up their services.

8. In case, you find yourself in a situation where the payment with CCCS is not affordable for you and there is no way to clear up your bills, your final resort will be to file bankruptcy. This may be a hard step to take but that’s the only way to come out of your present situation and improve.

9. Anyone who doesn’t have an emergency fund set should do so now. Without any funds for emergency use, the financial chaos might be devastating.

This entry was posted on Friday, November 30th, 2007 at 8:22 pm and is filed under Creditors, Debt. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.