When a debtor fails to make consistent payments on bills, loans, or credit cards, the lender may refer their debts to a debt collector. Debt collectors contact debtors to try to secure repayment of the loan.
In the United States, the average amount of debt each person has is over $90,000. People go into debt for several reasons. Many individuals take out student loans to pay for their post-secondary education. Individuals without health insurance and those with serious medical issues may incur medical debt. Most people borrow money to purchase expensive items, such as homes or cars. Although borrowing money may be crucial to meet your academic, medical, or financial needs, if circumstances prevent you from repaying those loans, it will affect your credit score and lead to contact from debt collectors. Take these steps to manage your debt, deal with the debt collection process, and restore your credit.
Address relevant issues that caused your debt.
Numerous factors can cause you to take out loans or use credit cards. For example, if you’ve been in an accident and are suffering from post-traumatic stress disorder (PTSD), your ability to work could be affected. Google “therapy near me” to find qualified therapists in your area, and see a counselor. Qualified therapists can help you process your trauma and develop strategies to cope with your PTSD. These strategies may enable you to resume regular activities and return to work. Whether you opt for in-person counseling sessions, teletherapy, or online therapy, seeing a mental health specialist can help you address your condition and restore your quality of life. Being in debt can also be stressful, and seeing a counselor can help you cope with the stress caused by your financial situation.
You may also have physical health needs stemming from an injury or illness. These health issues can cause you to accrue medical debt, but you may need to see a physical therapist or other medical professionals for treatment regain your health and return to work.
If your workplace or another party caused your psychological or physical health problems, they might be liable for your condition. A personal injury attorney is equipped to assess your situation, determine whether or not you may qualify for compensation, and pursue legal action on your behalf. Your lawyer may be able to negotiate a settlement for you. They can also provide information about the financial benefits you may be eligible to receive.
Take steps to start the repayment process.
Read about The Fair Debt Collection Practices Act (FDCPA) to learn how to stop collection calls. Individuals who owe money still have legal rights, and it’s essential to understand those rights and how they apply to your situation. When a debt has accrued, the original creditor often sells the debt to a collection agency. In some cases, debt collectors try to collect money from the wrong people or pursue collection for debts that have already been paid. The company has to prove that you’re responsible for the debt. If you challenge the debt, the debt collection company is required to investigate and is not permitted to continue to pursue payment during that process.
Debt collectors may also try to collect debts that have exceeded the statute of limitations. Contact an attorney specializing in FDCPA and debt collection cases to get a free evaluation of your case. Your lawyer can help you stop harassment and negotiate reasonable repayment plans if required.
It’s essential to be proactive because state law may allow your creditor to initiate wage garnishment. The debt collector files a claim and collects payments directly from your employer. Once wage garnishment has begun, you may need to go to court to change the terms or stop a wage garnishment from continuing. Your lawyer can advise you and help you navigate this process.
Rely on your faith.
Financial issues can cause psychological and emotional stress. If you’re religious, you can cope with the situation by turning to your faith. Read encouraging passages from your New Living Translation (NLT) Bible. With an NLT study Bible, you’ll have access to life application notes explaining how passages apply to your situation. You can use the concordance to locate scriptures about finances, stress, and other issues relevant to your situation. These verses can provide peace of mind and practical guidance for addressing your issues.
You can also visit your church, synagogue, temple, or mosque for prayer and receive spiritual support from your religious leaders. Many religious congregations offer practical support for members in need. You may also benefit from having your spiritual leaders pray for you and provide spiritual guidance appropriate for your situation.
Talk to financial experts.
Financial advisors are educated professionals who help people meet their financial goals. Financial advisors can provide information about investment opportunities or other financial matters. Credit repair specialists focus on helping clients identify and resolve outstanding debts. To secure services from a reputable credit repair specialist, look for one approved by non-profit organizations.
Financial experts can guide you by calculating your debt, creating a budget, and developing a debt repayment plan. Financial experts may be aware of the strategies you can use to reduce your debt and factors that will affect your minimum payments. For example, debt consolidation may enable you to group all of your debts and make one manageable monthly payment instead of multiple monthly payments. You may be able to lower your debt if you can secure a consolidation loan with a lower interest rate than what you’re paying on your car loan or other debts. They can also inform you of the steps you’ll need to take to restore your credit score. Common strategies for repairing your credit include reducing the amount of debt you have and making consistent monthly payments on your bills. You can also boost your credit score if you keep your credit cards and pay them off each month or maintain a low balance.
Reduce your living expenses.
You can manage your debts by reducing your monthly living costs. One way to do this is to move into an affordable residence. Search for “Austin storage units” to find suitable facilities and put some of your belongings into storage. Maintaining a smaller home will allow you to get a fresh start with lower rent and energy costs.
You can also reduce your energy costs by employing several energy-efficient strategies. Turn your water heater down from 140°F to 120°F and insulate your water heater to prevent heat loss. This will reduce the amount of time your water heater needs to run. You can increase your savings by using cold water when you do laundry.
Replace your light bulbs with energy-efficient LED bulbs. When possible, use natural light to avoid using lamps. Use weatherstripping or caulking to reduce drafts from old windows, and hang thick curtains to block out sunlight during the summer months. This will keep your house from getting hot during the day and reduce the amount of time you run your air conditioner.
You may also be able to reduce your monthly expenses by carpooling to work, taking public transit, and packing lunches instead of purchasing meals. Reducing food waste by eating or freezing leftovers is also an effective way of reducing your grocery budget.
The factors that caused your debt may determine the best strategies to use to handle debt collection. Take steps to restore your ability to work when necessary, and protect your legal rights. You can also benefit from guidance from spiritual and financial advisors. Once you begin repaying your debts and reduce your living expenses, you can prevent stress caused by debt collectors and work on attaining financial health.