GROWING DEBT & COLLECTIONS

Stay Calm. Create a plan. Take control.

Most of us use debt. Unfortunately, it can cause serious stress in our lives, especially when there’s been a loss of employment or health issues.

In those circumstances, credit cards, payday loans, and even some auto loans can become difficult to manage. When debt collectors start calling it only gets worse.

Debt collectors are in the business of using fear and other emotion to motivate you to make payments. Regardless of what it means to you or the well-being of your family.

Before we dive in, if you’re struggling with debt and debt collectors and want help reviewing your options you can with a financial coach. Click here to schedule a 15-minute call with a financial coach. The 15min call is free.

The best way to tackle both problems is by facing them head-on. By creating a plan and taking control of the situation you will not be resistant to a debt collector’s emotional tactics.

This may be difficult to do when you look at your situation. You may even have debt collectors calling and threatening lawsuits, arrest, repossessions, etc. You can do this.

Start by separating yourself from any emotion and fear. The best way I know to do this is to view the situation as if it were not yours. Pretend you are just helping a friend and follow these priorities.

Take care of yourself and your family first. I do not mean nice vacations and the best of things for the kids (if you have any), I mean the essentials. Before you do anything else you should pay your utilities, housing, food, and transportation costs. This is good because we know you will have a place to stay, food to eat, and you’ll be able to get to work to keep earning money. An excellent start for many!
You set the priorities. If you can’t seem to pay all the bills, then it’s time to decide who is getting paid and who isn’t. You may not be able to pay all your minimums, so you’ll have to prioritize. Use the information below as a start.
Pay secured debt first. A secured debt is one with an asset tied to it, like a mortgage or a car. You want to make sure those are paid and current because if not, they can come take the asset. However even if they do come and take the asset, like repossess the car, it doesn’t just make the problem go away. You may still be responsible for part of the debt. It’s just a bad deal. You may find you can’t afford to pay all your secured debts, if that’s the case you may need to sell the asset.
Pay unsecured debts too. You’ll want to pay all your unsecured debts too, just maybe not a full payment each month. You’ll eventually have to pay these debts off but don’t let them stress you out right now. Right now, you are making a plan to get control of the situation. You’ll get to them but for now make a payment to each of your unsecured debts every month, even if it’s only a few dollars.

QUESTION: Will making less than the minimum payment hurt your credit? Yes, you bet. But it would be silly to have your credit cards current and no money to put food on the table, right? I agree.

Debt collectors will try to set the priorities for you by using scare tactics. If you’re going through this, do not get emotional. Just work your plan, not theirs. You’ll have more confidence in your conversations with them if you know your rights. Find out more by reading about the Fair Debt Collection Practices Act.

If you believe you could benefit from reviewing your situation with a financial coach you can get started below.

Click here to schedule a 15-minute call with a financial coach. The 15min call is free.

Big Finance Goals

Financial Coaching & Credit Repair

GROWING DEBT & COLLECTIONS

Stay Calm. Create a plan. Take control.

Big Finance Goals

Financial Coaching & Credit Repair

GROWING DEBT & COLLECTIONS

Stay Calm. Create a plan. Take control.

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