Arguing With Your Partner
Money is one of the biggest reasons why couples argue. Financial issues can get so bad that they often lead to divorce as well. If you find that you and your partner are arguing a lot about money and that the tension between you two is rising, then this is a clear sign that youre in financial trouble.
During this difficult time its important that you two are on the same page and supporting each other. Set clear financial goals and work through them to alleviate the debt.
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Debt Relief Services To Watch Out For
We said it before and well say it again: Not all debt help is helpful. Yepthere are companies out there who make money off your desperation. Gross, right?
Thats why its so important to know what kind of debt help is actually helpful, which to steer clear of, and how you can demolish debt yourself.
What Happens After A Debt Collector Contacts You
Within five days after a debt collector first contacts you, the collector must send you a written notice that tells you the name of the creditor, how much you owe, and what action to take if you believe you do not owe the money. If you owe the money or part of it, contact the creditor to arrange for payment. If you believe you do not owe the money, contact the creditor in writing and send a copy to the collection agency informing them with a letter not to contact you.
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Help Me Im Drowning In Debt I Need Help With Debt Now
If youre thinking, Help me! Im drowning in debt. I need help with my debt right now! Youve come to right place. If anyone can assist you, we can. Well help you figure out what you need to do to find your footing and get your finances back on track, and if we cant help you ourselves, at the very least, well refer you to someone who can.
Rules For Collecting Debts
Some debts have specific rules and practices in place in relation to howthey are managed and collected. These are mainly debts which are owed to theState or a State body. In particular, taxes, social welfare overpayments, localauthority rents and housing loans, utility bills and TV licences all havespecific rules and procedures. Find out more about the rules for specific debts.
There are general rules under consumer credit legislation in relation to collecting debts, including rules inrelation to privacy, contact points and harassment and intimidation. There is aparticular codeof conduct for how lenders must engage with people in mortgage arrears orpre-arrears.
If you do not engage with your lender, your lender will most likely initiatelegal proceedings to recover the debt.The case can be taken in the District Court, Circuit Court or High Court,depending on the amount of money involved. Once your lender has a Courtjudgment setting out the debt, this judgment can be enforced in variousways, including, in extreme cases, through bankruptcyproceedings. Being in arrears on debt repayments can also have otherconsequences, for example, it can affect your and make it difficult to get credit in the future.
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Mistake : Not Prioritizing Your Debt
Unlike the federal government, average Americans cant just keep piling up debt as if it will never come crashing back down on them. Due to interest rates, your financial hole is only going to get bigger if you ignore it.
Remedy: Focus on the problem, and the solution. One way to get focused is to take a piece of paper the size of a credit card and write down five debts you want to get rid of. Tape it to your credit card. Every time you reach for that card, youll be reminded that youre adding, not subtracting to the problem.
As for solutions, the simplest is to make a plan, get a budget and stick to it. If you need help, millions of Americans have found relief by consolidating their debts into one monthly payment through a debt management program.
Consider Lending Options That Could Provide Cash But Be Careful
As you look for ways to keep yourself afloat during this period of unemployment, you may consider financing solutions that can provide cash. Getting funds that you keep you out of the red for a few months may sound like a no-brainer. However, there are some key points that youll want to consider before you get a loan that you potentially dont have the means to pay back.
- How much time will you have before the new loan payments start? Will that be enough time for you to find new full-time employment?
- How much does the new loan increase your financial risk? What will you be risking by taking those funds out?
- How much will this new loan cost you and when will you need to pick up that tab?
Here are some of the most common financing solutions that people consider when theyre facing unemployment. Understand the risks of each of these options and make sure to talk to an expert before you use any financing solution during a period of unemployment.
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Dont Take On Any New Debt
None. We know its hard , but trust ustaking on debt robs you and your family of a secure financial future. Your choices right now can and will impact future generations of your family tree. So dont take on even another penny of debt.
To start with, its time to get out your favorite pair of scissors and do a plasectomy. Yupwere talking about cutting up those credit cards! The best part? No medical experience required.
You may feel your heart start to race and your hands begin to sweat. But hear us out: Having a credit card for emergencies seems like a good idea until your next emergency looks like your next afternoon coffee run. When you cut up those cards, youre choosing to put an end to that awful cycle of debt for good.
Lower Your Interest Rates
Interest provides wealth to banks but stress to borrowers. Though It may seem easy to use plastic for a purchase, in the long run its more expensive if you cant pay the bill when its due.
Think in real terms. That big-screen TV with the bajillion pixels cost $1,200. Paying $50 a month on that TV at an interest rate of 18% would take 30 months to pay off and eventually cost $1,498.75. Thats an additional $300 of interest payments or the cost of a Nintendo Switch.
Consumers can try to negotiate a lower interest rate with their credit card companies. The call is worth it card companies would rather consumers pay something each month than see them default. Be polite and honest with the representative, but dont be afraid. You matter every bit as much as the person on the other end of the phone.
When you call, have an idea what rate youd like. That will help as you negotiate. Tell them your positives how long youve had the card, how your on-time payment record is good and that your credit score is improving. If the first try doesnt get you where you want, dont fret. Try again. Or wait several weeks, call again and tell them youve got a competitors card with a better rate and youll switch if your current company cant match the offer. If at first you dont succeed .
Several credit card companies, including American Express, Bank of America and Chase, offered relief during the worst days of COVID. Check online for programs through each account.
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Work With Your Creditors
Reach out to your creditors to explain your situation. A credit card issuer may be willing to negotiate payment terms or offer a hardship program, especially if youre a longtime customer with a good track record of payments.
If your issuer offers a hardship program, it may provide relief when circumstances beyond your control like unemployment or illness impact your ability to manage payments. Whether you negotiate with your issuer or accept the terms of a hardship program, either option could lead to more affordable interest rates or waived fees, depending on the issuer.
These small changes might be just enough to help you get a handle on your debt, and the worst that can happen is they say no.
Is A Debt Management Plan A Good Idea
Whether a debt management plan is a good idea depends on your situation. They dont help everyone. A good credit counselor will spend time reviewing your specific financial situation and then offer customized advice to help you manage your money. If a credit counselor says a debt management plan is your only option without doing these things first, find a different counselor.
If you and your counselor decide a debt management plan is best for your situation, its a good idea to check with all your creditors to be sure they offer what the credit counselor describes to you.
A successful debt management plan requires you to make regular, timely payments, and can take 48 months or more to complete. You might have to agree not to apply for or use any more credit until the plan is finished.
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Change Your Thinking About Debt
I developed a no excuses mindset that I would need to get out of the mess. The voice in my head that said I deserve this had to be silenced.
I started thinking about money the same way you have to think when you are on a diet. Only, I replaced food with dollars. Instead of watching every bite I put in my mouth, I watched every penny I spent.
Think about this If a rich man comes into money, he invests it. If a middle-class man comes into money, he pays off all of his bills. But, if a poor man comes into money, he spends it. Why do you think that is? Its because he has a desperate feeling that hell never have this opportunity again. He lives in the moments gratification instead of having a long term plan. He has no hope. So, he goes on a shopping spree to look and feel rich instead of one day being rich.
Although I wouldnt have classified myself as having a poor mans mentality, maybe I did. I mean, I spent money that I hadnt yet made. And, even though I could justify the expenses and tell you that they were mostly auto repairs and medical bills, who cares? No excuses! I was in debt and I had to find a way out.
Whats The Difference Between Chapter 13 And Chapter 7 Bankruptcy
Chapter 13 lets people with a steady income keep property, like a mortgaged house or a car, that they might otherwise lose through the bankruptcy process. In Chapter 13, the court approves a repayment plan that allows you to pay off your debts in three to five years, rather than give up any property. After you make all the payments under the plan, you receive a discharge of your debts.
Chapter 7 is known as straight bankruptcy. It involves liquidating all your assets that are not exempt. Exempt assets might include cars, work-related tools, and basic household furnishings. Some of your property may be sold by a court-appointed official, called a trustee, or turned over to your creditors.
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List All Of Your Debts
The first place to start is not complicated: List all debts. Mortgages, car loans, credit cards, student loans all of them. This should not be difficult. If you dont have an easy way to list them, a free copy of your credit report is available at AnnualCreditReport.com. That will have all your creditors and how much you owe. List what is owed, the interest rate and the monthly payment. You now have a snapshot of where the money needs to go, and who is charging the most interest.
Currently Not Collectible Status For Tax Debt
If you owe back taxes to the IRS, theres a status that you can file for during a period of unemployment called Currently Not Collectible . This status lets the IRS know that you dont have the means to make any payments towards your tax debt. It stops all IRS collection actions until you have the means to start paying off your debt. CNC status will not stop penalties and interest that the IRS applies to your balance, but it will stop things like bank levies and liens.
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Check If A Dro Is Right For You
If youre thinking about getting a DRO its important to know:
- if you dont meet the criteria or give extra information when youre asked for it, your application could be turned down – check what to do if your DRO application is refused
- it costs £90 to apply – you can pay this in installments but you wont get it back if your application is refused
- it wont cover all debts – you’ll still have to pay back child maintenance arrears, court fines, student loans, social fund loans, personal injury compensation and any debts caused by fraud
- if you have rent arrears in a DRO your landlord cant force you to pay what you owe, but they can still try to evict you
- it might make it harder to borrow money in the future – check how a DRO will affect your credit rating
- youll have to tell the creditor about your DRO if you want to borrow more than £500 during the 12 months
- you wont be able to set up your own company or be a director of another company, even under a different name, without the courts permission
If you get a DRO but your situation improves during the 12 months – for example if your income goes up or you get a payment for backdated benefits, the DRO can be stopped. You wont get your £90 application fee back. Check what to do if your circumstances change.
Ways Of Repaying Your Debts
There are many ways to repay your debts. You can get free and independent debt advice online and face-to-face to help you find the best way to deal with your debt problem.
This includes advice on what restrictions and responsibilities you have to agree to and how different repayment options affect things like:
- your credit rating
- your home, for example, if it is still at risk of being sold to pay your debts
- what action your creditors can take to recover their money, for example, taking you to court to make you bankrupt
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Who Can I Contact For Free Debt Help And Advice
Some debt management companies charge fees for their advice. Theres no need to take on more debt when there is free help available. These registered charities have debt advisers who can give you free, confidential debt advice:
- Your local Age UK can direct you to organisations that can help.
- Citizens Advice offers help face-to-face, by telephone or by email.
- Debt Advice Foundation provides free debt advice and support through its helpline and website.
- National Debtline provides advice over the telephone , online and by email. They can send you a free self-help information pack.
- My Money Steps is a free online debt advice service run by National Debtline. You can develop your personal action plan to help manage your money and deal with debts.
- StepChange Debt Charity provides advice over the telephone or online via its free debt advice tool, providing a personal action plan and a recommendation of available solutions for dealing with debts.
- Advice UK has a network of independent advice organisations.
- Shelter provides advice about housing and homelessness, including managing debt, paying rent or mortgage arrears, and dealing with possible eviction or repossession.
Whats A Credit Counseling Agency
A reputable credit counseling agency can give you advice on managing your money and debts, help you develop a budget, offer you free educational materials and workshops, and help you make a plan to repay your debt. Its counselors are certified and trained in credit issues, money and debt management, and budgeting.
Good credit counselors spend time discussing your entire financial situation with you before coming up with a personalized plan to solve your money problems. Your first counseling session will typically last an hour, with an offer of follow-up sessions. Good counselors wont promise to fix all your problems or ask you to pay a lot of money before doing anything.
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Your Debts Are Getting Out Of Control
You know the situation is serious and you need some professional help to accomplish your goals. It is time to prioritise paying off your debts so you can build a better future.
Watch out for high-pressure sales tactics, unrealistic promises, high fees, delayed payments and those encouraging you to take out a high-interest loan. Be suspicious of offers to help you improve your credit rating.
Check If You Can Get A Debt Management Plan
If you get a debt management plan you agree to pay off your debts with one monthly payment to a DMP provider. The DMP provider is an independent company. Theyll deal with your creditors for you and make your payments.
How long your DMP lasts will depend on how much debt you have and how much you can pay off each month.
Anyone can get a DMP – it doesnt matter how much debt you have. You might be able to get a DMP if:
- you can pay your priority debts but youre struggling to pay other debts like credit cards and loans
- you can pay at least £5 a month towards each of your debts
You can change your DMP at any time, for example if your income increases and you can afford to pay more.
You can cancel your DMP at any time if you decide its not the right debt solution for you or youre struggling to pay. If you havent finished paying off your debts youll need to contact your creditors to arrange another way to pay.
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