When The Creditors Start Calling: 3 Tips To Avoid Mistakes

Sometimes it's hard to know if the amount of debt we have is healthy

. It's pretty easy for a manageable amount of debt to quickly spiral out of control. What should you not do if you feel like you might be losing control of your debt?

First, DON'T just pay the minimum on your credit cards. If all you do is pay the minimum, and keep buying things with your credit card, your balance will continue to increase. How so? Rather than get you out of debt, paying only the minimum traps you into debt because those payments never dent the actual balance. Not only will this increase the amount you owe, but will, in turn, cause the minimum payment to go up. Soon enough, you won't be able to pay the minimum.

Second, DON'T use your loved ones to help you pay for your debs. It's not a secret: when you are in debt, if you ask your loved ones for help, they most likely will give it. Nobody wants to watch a loved one struggle, and if they feel like they can help you, they will try. But, the generosity of others often comes with a very high price. Not only do you risk hurting your most important relationships, but you are masking the real problem of your own debt. The charity of your friends and family will eventually cause you to think you are safer than you are.

Third, DON'T simply pay a debt settlement firm because of their flashy promises. Unlike bankruptcy, which has almost 500 years of legal history, debt settlement is relatively new and has an uncertain future. Many times you must pay a steep fee before they even begin, and there is no certainty that they will be able to get you the settlement they advertise. Additionally, debt settlement firms are unable to prevent your creditors from harassing you, suing you, or garnishing your wages.

It's easy to think that there's nothing else to do! But in reality, you do. A Chapter 7 or Chapter 13 bankruptcy could be a wiser choice than the uneasiness of making minimum payments, using your family and friends, or debt settlement agencies.

A bankruptcy attorney might be the perfect person to get you protection from foreclosure and credit card debt help. What debt settlement agencies don't want you to know is that a Chapter 7 bankruptcy can eliminate debts. Bankruptcy defends you from creditors by law, blocking collection calls and giving you relief from your creditors until you are financially secure.

If you have found yourself doing any of these three DON'T's it wouldn't be such a bad idea to do some research on other options.

by: Jim Brown

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