Debt Problems - How to resolve your debt and avoid creditor calls

By Good Nelly

Ask Nelly

If you're struggling with your bill payments and ignoring creditor calls, it's time you stop neglecting the problem and find out ways to tackle your bills. If you find it hard to do it on your own, seek professional help with debt problems so as to pay off your dues and restore financial stability. This article explains the common debt problems and the options you may consider to get help with debt problems.

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How to get help with debt problems

Not all individuals have the same type of debt and there isn't a single solution to all debt problems. If you're looking to get help with debt problems, you need to understand which option is suitable for the kind of bills you have. Given below is a list of debts with options to help you get out of them.

• Credit card bills/store cards: If you're having problems with credit card (cc) or store card bills due to rising interest rates or mounting cc bills, you may try out credit card consolidation or bill consolidation. By doing so, you can consolidate multiple cc bills into a single monthly payment with reduced interest costs.
  
  However, if you cannot make the minimum payment on your credit cards, then it's better to go for a settlement program. Such a program offers help with debt problems by reducing your outstanding balance.


• Medical bills: If you need help to pay off medical bills, you may go for debt negotiation or settlement. A debt relief company can negotiate with the hospital or doctor in order to reduce your bills by 40-60% of the balance you owe.
  
  However, if you're unable to pay medical bills before they become due, you need an alternative payment plan that you can afford. This is when a consolidation program can provide help with debt problems. Herein, you make a single payment each month to your consolidation company which then disburses the funds amongst multiple creditors. It's comfortable to make a single payment, that too with reduced rates.


• Student loans: Student debt consolidation loan is a common way out of student loan problems. Herein, you can take out a single personal loan in order to pay off the student loans. Then you need to repay the consolidation loan through lower monthly payments.
  
  It's better not to include federal and private student loans under the same consolidation loan as because you may lose the benefits related to federal student loans.


• Pdls and personal loans: You may consolidate payday loans and other unsecured personal loans if you're unable to meet the payments. A settlement program also offers help with debt problems on personal loans but it is more suitable for those who'd like to reduce the total amount they owe.


• Utility bills: If you have past due utility bills, it's better to consolidate them when you cannot afford the monthly payments. Depending upon your dues, you can also settle the payments on utility bill. Otherwise, you may lose the services on gas, electricity, telephone etc.


• Collection accounts: These include credit accounts which are sold off to collection agencies. If you're getting collection calls, the first thing you need to do is ask for debt validation. Once the account is validated and you're sure that you owe the dues, you can consider settlement as an option to repay the money. However, if you'd like to reduce the interest payments only, then you may enroll in a consolidation program.


• Auto loans (repossessed): Auto loan is primarily a secured loan but after the vehicle is repossessed, it can be considered as unsecured credit. Like most unsecured loans, auto loans (repossessed) can be settled for less than what you're supposed to pay.


• Tax debt: There are few firms that can negotiate with the IRS and help you consolidate your tax bills. So, the best way to get rid of federal/IRS tax debt problems is to go for a Self repayment plan. This is where you assess your financial situation and prepare a well-planned budget in order to pay off the tax dues.


• Multiple bills: When you're in financial crisis and have multiple bills (credit/store cards, medical bills, payday loans etc) which you cannot consolidate or settle altogether, it's better to go for credit counseling.
  
  In credit counseling, a credit counselor offers help with debt problems after reviewing your financial situation. The counselor assists you in planning a budget so that you can control your spending and invest more towards bill payments. In case you owe a lot of money, the credit counselor may ask you to follow a debt management plan (DMP).
  
  Through a DMP, you get help with debt problems as the credit counselor negotiates with your creditors in order to lower interest rates. Your creditors may also reduce or eliminate late payment fees and over-the-limit charges (for cc bills).

There can be different ways of solving debt problems due to credit/store cards, medical bills, collection accounts etc. You need to identify the right solution to your debt problems keeping in mind your own financial situation. Depending upon the type of bill you need to pay and the money you owe on it, you may choose a suitable option to pay off your dues and restore your finances back on track.