Your Financial Health

If you’re having problems keeping up with your debt load, you really should act now instead of doing nothing. Waiting can cause more troubles in the future, whether it’s a damaging credit history or bankruptcy resulting in an important asset loss, such as your home. If you’re experiencing financial difficulties, then consider taking these actions to prevent future financial ruin.

If you’ve acquired a significant amount of debt and are struggling to pay your monthly bills, it’s time to take charge of the situation before you start receiving collection calls.

Examine each debt.

Be certain that the amount the credit collector claims you owe is actually the correct sum you owe. To dispute a debt, first try speaking with a representative from the credit company directly to resolve your concerns. If you still have issues with the debt, contact your local or a state consumer protection organization. In situations of serious credit exploitation notify your state Attorney General.
Communicate with your creditors.

Make your creditors aware that you are struggling to make your payments. Give them reasons for your difficulties. Let them know if you’ve recently become unemployed or if you’ve encountered any unexpected emergency expenses. Try to arrange a viable payment schedule with them. Most creditors are inclined to work with you and welcome your honesty.

Note that most automobile financing contracts allow the creditor to repossess the vehicle without prior notice if the loan goes into default status. If the automobile is repossessed, it’s possible the borrower will be required to pay the full amount owed on the loan in addition to towing and storage expenses. You don’t want to wait until your loan is in default. Try to resolve the problem with your lender as soon as you suspect you won’t be able to keep up with your payments. You may want to consider selling your vehicle to pay off the debt rather than incurring additional repossession expenses.

Budget your payments.

Prepare a payment plan that enables you to lower your debts. List all mandatory expenses, such as shelter and healthcare, then consider optional expenses, such as entertainment and recreation. Keep on track with your budget.

Try to lower your expenses.

Cut back on unnecessary spending, such as dining out or buying expensive electronics. Is it possible to use public transportation or participate in a ride sharing service instead of owning a car? Use coupons or consider generic products at the grocery store. Pass up impulse items. Most importantly, avoid acquiring new debt. Keep your credit cards at home. Try to buy only what you need and use cash or a debit card whenever possible.

Consolidate and settle your debts.

It makes sense to apply any low interest savings toward paying off high interest credit card debt or loans. Research ways to settle off high interest loans, with credit cards or by refinancing with a consolidation loan. Some loan consolidations actually increase the interest you owe or charge hefty fees, so be cautious. Consider a second mortgage. However, keep in mind that second mortgages significantly raise the risk of losing your home.

You can reclaim strong financial health by taking responsible actions. Don’t hold off until you’re facing bankruptcy court. If you’re experiencing financial pressures, don’t hesitate to contact an experienced accountant at Grobe and Associates for advice. Call us today at 608-210-1200.