When you start to get behind in your bills, your creditors often wait a several weeks before notifying collection agencies. During this time, it might be smart to write your creditors and request an extension or a reduction on what you owe so that you can pay the debt off slowly.
Since most creditors want the money they will extend your time to repay the debt. This is to their benefit too as it is a big hassle for them to go through the motions of reporting you. Most creditors want their clients to come back and believe that if given a chance you will pay off your debt and start a new account.
After you have talked to each creditor, set up a budget plan that will help you through eliminate your debts. The first thing you must do is add up your monthly living expenses - rent or mortgage, heat, lights, groceries etc.. These are the bills that MUST be payed for you to survive. Then subtract this from the money your salary pays and the difference is what you can budget to pay down your debt each month.
If you don't have anything left over at the end of the month for debt reduction you might have to find a job that pays more, move to a cheaper place or use less utilities per month.
If you have two cars and can do without one, it is smart to sell one of the them and apply the balance toward your debt.
Another thing you can do is sell off some of your personal items to pay the debt. While this may seem harsh, you can think long-term and know that you can eventually replace your items after your debts are repaid.
You might try getting rid of all that stuff in the garage or attack at a yard sale, or piece out some of the nicer stuff on eBay. Consignment stores are also a good place to turn unused items into much needed cash.
Another thing you can do is cut back on expenses - really take a look at what you spend and where you can cut back.
Do you buy products or groceries on sale, or are you paying the high fees for name brands?
Do you buy groceries in bulk, or go to the store every other day buying only a few items?
Do you spend more on gas simply because you haven't tuned up your vehicle?
Use coupons and buy items on sale then apply the savings to your credit bills.
If you like to read books or magazines get them at the library instead of paying for subscriptions or buying expensive books new.
Try buying clothing or household goods at consignment shops, shopping at yard sales, and spending less money on gifts and vacations.
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