If you know about your debts and the common problems that it might create in your life, personally or professionally or financially, you will know that there are a lot of ways in which you can stay away from debt or debt accumulation. You will know about the various ways and the laws in which you can settle any debt no matter how big your debt is. Proper knowledge about common debt problems will enable you to know even the benefits and consequences of filing for bankruptcy.
There are different ways to settle debts and it is natural that you may not know about these. Therefore, to achieve success in your debt management process, it is better that you take help of one of the several credit counseling services.
- They will provide you will various tips and advice along with several resources that will help you to solve your financial problems.
- With their advice on debt management, you will get help in budgeting your income and expenses so that you have enough money in hand or create an emergency fund to pay off your debt continually and achieve your financial independence in the end.
- You will also come to know about different educational programs offered by different organizations and agencies on money management.
In short, the expert counselors will discuss your financial situation, consider all aspects and help you to come up with a personalized debt management plan.
These credits counseling services are often provided free or for a very low fee at different locations. There are different types of credit counseling options that you can choose from ranging from:
- Credit unions
- Religious organizations
- Extension offices
- Nonprofit agencies.
But make sure that the credit counseling service you are consulting with is accredited with either National Foundation for Credit Counseling or any other authentic Financial Counseling Association of the country.
Different options available
According to your eligibility that is governed by your credit score, credit history, present income and several other factors, you may opt for different types of reliefs and programs to get out of debt and it is not always true that you will need a debt settlement no matter how enticing and recommending the debt settlement reviews may appear to you.
- If you are eligible and fall under the provisions of the Servicemembers Civil Relief Act, you may get a reduced interest rate on your mortgage payments or credit card debts. You will be protected from evictionor a delay of all civil court actionssuch as foreclosure, bankruptcy, and even divorce proceedings. You will have to contact the local Armed Forces Legal Assistance office to know whether you qualify or not.
- You may even make a formal debt collection complaint to the Consumer Financial Protection Bureau to get some immediate relief.
- If you find that the approved credit counseling agencies are not being helpful, you can contact the Department of Justice’s Trustee Program.
- You may also opt for debt consolidation if you have various types of debtssuch as credit card debts and loan payments. It will roll all your debts into one monthly payment. If you go through a credit counseling service you may even get a simplified or lowered monthly payments, but make sure that you consult a qualified credit counselor first.
If you have any problem with the lender when you want to consolidate your debts, discuss the matter across the table with your lender first. If that does not help you in any way to resolve the issue, you can make a formal complaint to the Consumer Financial Protection Bureau.
Debt collection issues
You may at times face problems with the debt collector who is a person or an agency that collects debts from people regularly that are owed to different creditors. Debt collectors are hired by the creditors usually when the loan account is past-due.
Debt collectors can be any collection agency or even lawyers who collect debts from people as a part of their business. Debt collectors can also be companies that buy delinquent debts from creditors and then collect the dues from the original debtors.
Whoever is your debt collector all must follow The Fair Debt Collection Practices Act (FDCPA). According to the law debt collectors are prohibited from using abusive language, take unfair means or deceptive practices to collect money from you. If they do, you can file a formal complaint to the Consumer Financial Protection Bureau.
Types covered and collection process
The Act covers almost all types of debts that include personal, family, and household. It covers:
- Money owed on credit card accounts
- Auto loans
- Medical bills
However The FDCPA does not cover those debts that are incurred for running a business.
According to the law the debt collectors has to follow specific process once they contact you. Within the five days after contact, the debt collector must send you a written notice that should contain the name of your creditor, the amount you owe, and about the actions that you may take if you think that there is any dispute in the amount mentioned in the notice.
If you owe the money to your creditor then you must make arrangements to pay for it and contact your creditor. On the other hand, if you do not owe the money and know for sure that there is a mistake then you must contact the creditor and say about it all in writing. In addition to that, you must send a copy of your letter to the debt collection agency as well to informthem that they should not contact you but the creditor instead.
At no cost the debt collector can cross the limits ascertained by the law and contact you at inconvenient times before 8 AM or after 9 PM unless you agree to it. They cannot contact you at work if your employer disapproves it, contact your friends and relative or continue contacting you even after you have send a letter asking them to stop. Harassing a debtor is punishable as per the law.
Kelly Wilson is an experienced and skilled Business Consultant and Financial advisor in the USA. She helps clients both personal and professional in long-term wealth building plans. During her spare time, she loves to write on Business, Finance, Marketing, Social Media. She loves to share her knowledge and Experts tips with her readers.