Sometimes the reality of the economy can hit home and hard. What happens if you get to the point where you are finding yourself behind on your credit cards and other debt? What should you do?

Creditors want to work with you to find win-win situations because they want you to pay off your debt. It is best to work with them directly and as soon as possible. Decide to be proactive and not reactive with your debt. Being proactive means making the first call - call your creditors before they begin calling and sending past due notices.

Here a few suggestions:

1. Work with creditors to find solutions for paying off your debt. Most will be willing to help you formulate a workable plan. It’s probably best if you have a plan in mind before you make the inital call. It is up to each credit card company/creditor to determine what type of repayment plan, if any, they will be willing to accept.

2. Remain unemotional when you speak with creditors. Be cool, calm and logical.

3. Most creditors will work with you but some won’t. The bottom line is that creditors want to be paid. Most companies are willing to find workable solutions.

4. It is up to you to reduce your spending.


Here are some possible solutions to help pay off your debt:

* Loan refinancing – this is a new loan with a new payment schedule and usually with revised interest rates.

* Loan revision – same loan you currently have but with probably higher interest, lower payment and revised payment schedule.

* Loan extension – some creditors will not require payment for 30-60-90 days and some will accept a partial payment for an agreed length of time.

* Loan consolidation – a new loan designed to pay off several debts together. Monthly payment will be less and is paid over a longer time.

* You may want to contact the nonprofit organization National Foundation for Credit Counseling. This is a national service that can help you find a credit advisor/counselor. The NFCC will work with you and your creditors for free or at a low fee. You can call them at 1-800-388-2277. Or visit them online at www.nfcc.org


***Beware of credit repair companies claiming to remove or change information on credit reports. It is illegal to do so. The Federal Trade Commission issued a warning to all consumers about this very subject. They asked me to share this with you.

Here’s is a part of the FTC advice:
“The FTC has free information to help people learn how to improve their creditworthiness and lists legitimate resources for low or no-cost help. We hope you'll help us get it to the people who need it most. Please link to the consumer brochure, Credit Repair: How to Help Yourself ; grab our short video from the press release, and let your readers know that they can learn more about managing credit and debt at ftc.gov/credit. All the information is in the public domain.”
You can go to the Abundance and Wealth forum to read the entire FTC message. Here’s the direct link: Notice about credit repair scams from the FTC

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