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5 Tips for Dealing with Consumer Debt

Millions of Americans struggle with the looming cloud of debt over their heads. Debt can come in the form of credit cards, mortgages, student loans and more. Debt can cause stress, anxiety and fear of the unknown, especially if you are struggling just to make the minimum monthly payment.

When talking about debt relief, here are dos and don’ts to keep in mind. You want to clear as much of the debt as possible but don’t want to throw your credit score out the window. Read along to pick up valuable information about what you can expect and what you should avoid when it comes to debt relief.

  1. DON’T try to negotiate a settlement with a creditor by yourself. There is often an uneven playing field between banks and consumers, and this can quickly become a disadvantage during negotiations. Additionally, there is fine print that you may not become aware of until later such as income tax implications on reduced debt portions. Always consult an expert who can help you approach a credit card settlement with the best timing and offer, a company who can also help document the deal in such a way that is final. If you are feeling overwhelmed and receive an offer to settle your debts by your creditor, it can be tempting to accept without further consideration. Make sure you enter into such an agreement armed with all the information available to make the most of your settlement.
  2. DO Consult with a debt management team to see what you can do about your debt and how you can get much needed relief. A team of financial experts will give you advice (for a price) and give you tools to manage the debt on your own. An expert who is well versed in debt relief settlement (and not a creditor!) will give you realistic options as to the road you should be taking.
  3. DON’T wait! The longer you wait the worse your problem will be! Get help as soon as you can. You are not alone, millions of Americans struggle with debt. Your case will not be the first a financial expert has seen.
  4. DO keep up with your credit score. There are multiple websites that will give you a ballpark number on what your credit score really is. Track your score after payments and purchases to stay ahead of any potential debt that might be accruing.
  5. DO practice practical budgeting! There are so many resources online and through financial law firms that can help you make smart decisions when it comes to your financial situation. Look some of these up and practice smart budgeting. Start with home and auto loans, you don’t want to lose your house or have your car repossessed. After that work outward. Where can you save money? How can you cut costs?

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DISCLAIMER

This article has been reviewed and approved by Thomas A. Moore, managing attorney Brownstone Law Group, PC. California Bar # 148698. This article is for informational purposes only, does not provide legal or tax advice of any kind or form any type of attorney/client relationship. This article was published on January 29, 2016.