just want them to be fair
I acumulated alot of debt as the economy tanked so did my business. I have since moved to a new job. 1 of my credit cards went to collections and the rest of the credit cards are closed but still with the credit card companies and up to date on minimum payments and they are coming down in debt owed as well. The One credir card with the collections agency was $10,000+ I made a lump sum payment of $2000 and started to make monthly payments of $300. But these guys are relentless calling me non stop at work etc. I thought we were ok but then they gave my file to another lady and she tore so many strips off me it was rediculous. I even said to her in the conversation `you are making my heart hurt` Her reply was `good` So they are getting 26%+ interest and the debt is coming down. What do I do to get them off my back. I managed to stay out of bankruptcy. But I am now thinking I should have just to get these guys off my back. What should I do? cosolidation loan out of the question as my credit rating has dropped to 441 but climbing. Just need a little time. My net worth is climbing by $2000 per month but still in the negative. I own my home but no equity that can be tapped into.
Posted from: Alberta
In of alternatives to deal with this situaiton, we suggest people consider the following options when they are experiencing financial difficulty include:
1. Negotiate with your creditors. Explain why you have fallen behind in payments. Outline your financial situation and expectations for the future. Suggest a payment plan that is realistic and reasonable for both you and your creditors. As this is an informal process make sure that if you come to an agreement get written conformation.
2. Apply for a consolidation loan. Take out a loan to pay off all of your debts. This can potentially lower your interest rate, total monthly and sometimes the total length of the contracts. With consolidation loans it is important that you examine your current spending habits and stop using your so you do not continue to fall further behind.
3. Make an application to Credit Counseling. This is a voluntary program where your debts are pooled together (they aren’t actually paid off) so that you are only required to make a single monthly payment to a non-profit counseling agency. As you make your payments the agency forwards funds to each of your creditors in proportion to your total debt. The advantage of this procedure is that usually the interest on your unsecured debts is reduced to prime or even eliminated. You are required to repay 100% of what you owe, but because of the reduced interest your monthly payment is much lower than all of your minimum payments would have been without the plan.
4. Make a proposal to your creditors under the Bankruptcy and Insolvency Act. This solution is used by people who cannot afford (or get approval for) a consolidation loan or a credit counseling plan, but don’t want to file bankruptcy. In a proposal you offer to repay a portion (perhaps 100%) of the debt that you owe. Proposals are an excellent alternative to bankruptcy, but they are not well known so I suggest you contact a local trustee and ask them about proposals if you are interested in this solution.
5. File for bankruptcy. If none of the other procedures listed is appropriate for you then bankruptcy may be correct solution. The concept behind bankruptcy is that you cannot afford to repay even a portion of your debts. To file bankruptcy you must meet with a licensed trustee.
Of course you have already ruled out a consoldiation loan, so you may want to consider either contacting Credit Counselling Services of Alberta or potentially a local trustee as either of tehse will reduce the impact on yoru credit, reduce or elimitate any interset, but also prevent the creditors from harrassing you.