Meeting Debt Obligations
Few things can weaken a person’s resolve and confidence like the accumulation of debt. There are times when people do not pay attention to their spending and run up thousands of dollars worth of debt buying things they do not need and never use. And there are life situations like catastrophic medical events that can result in people having to declare bankruptcy through no fault of their own. Keeping debt manageable and keeping a good credit history make life easier. You never know when you will need access to credit, and when you do, you want to get a good interest rate and favorable terms for repayment.
If you are already in a situation where your debt is out of control and you cannot make even minimum payments on revolving debts like credit cards, the worst thing you can do is just walk away from your obligation. As soon as you see that your income is not going to be enough to service your debts, you need to contact your creditors and let them know. No, they will not just forgive you and tell you to pay when you can, but they will make note of your situation, and may offer some flexibility, such as a lower interest rate, or the waiving of some fees so that you can service the debt to the best of your ability.
If you have already defaulted on credit and have a poor credit rating as a result, the situation is not hopeless. Every American by law can receive one copy per year of each of his credit reports from the three major credit reporting bureaus: TransUnion, Experian and Equifax. Everyone should do this regardless of credit history because up to one-fourth of all credit reports contain serious mistakes. Even if you have poor credit, you do not need mistakes on your credit report making it worse.
There are legal processes that the credit reporting bureaus use for disputes over information on the reports. You can ask them to review and remove negative information on your report that you believe is wrong or based on incomplete knowledge, and they are required to do so.
Assuming that you have checked your credit reports and made any corrections and disputed any alleged mistakes, what then? There is no way around it: dealing with debt requires discipline and resolve. There are a number of methods of reducing and eliminating debt, and none of them is based on magic. But you do have options, and some lenders are more flexible than others. Most credit card lenders would rather you pay back your obligations at a lower interest rate than fail to pay altogether at a higher interest rate. Keep this in mind if you call one of your credit card issuers to discuss paying off your debt.
With hospitals and medical establishments, often there will be a negotiator, or a supervisor in accounts receivable who is willing to discuss options with people owing them money. If you are a longtime client, with a reasonable history of paying your medical bills, they will probably be willing to work out a payment plan with you. They don’t want to go to collections or to court any more than you do.
There is no way around it: debt repair requires work, and once credit is repaired, it requires discipline to avoid falling back into debt. It is vital that you know your rights with relation to your credit report and debt collection. It isn’t easy, but once you’ve paid off debts, all the hard work will be worth it.