Solving Debt without Payday Loans
Friday, July 24, 2009@ 6:18 AM
Personal Finances and Solving Debt
How to get out of debt and manage personal finances in present economy is the focus of an article in Longview News-Journal.
About 80%, out of about 37 million consumers in debt collection mode, do not reply or make contact with the collectors.
Three typical kinds of debt:
- Unexpected debt due to unforeseen circumstances
- Predictable debt due to regularly spending more than the income
- Shock debt due to changes in the interest rate of a long-term loan
Resolving debt is a case-by-case solution. Here are some possible methods to get out of secured debt:
- Verify and validate your debt with the debt collection agencies
- For a secured debt, you can request for forbearance
- Arrange a repayment plan with the lender: modifying interest rates, monthly payment or type of loan
- Obtain a deed in lieu of foreclosure
- The alternative of selling short, where the bank accepts for the house a reduced amount of the initial price
In the case of unsecured debt:
- If possible, pay the debt in full
- Debt management, debt consolidation for 3 to 5 years
- Debt settlement only with legitimate businesses
- File for Chapter 7 or Chapter 13 bankruptcy, which is not good for the credit record
Some ways to deal with the debt collection agencies:
- Stop phone collection calls by sending a written letter
- Dispute the debt through a written letter
- Communicate and reciprocate with dignity and respect
All of the above represent possibilities of solving debt situations in the case of long-term credits such as mortgages and credit cards, not circumstances involving short-term loans such as payday loans.
