Being in arrears with your bills is one of the most worrying situations for many people. Inability to settle your bills and debts is often occasioned by life changes such as loss of employment or bad business. Regardless of the reason, you will need to negotiate and work with your lenders to come up with a favorable payment plan.
Simultaneously, you must undertake other measures to soften the damage associated with defaulted payments. If you are struggling to meet your financial commitments, please consider taking the following steps:
Come Up With A Budget And Prioritize Payment Of Pending Bills
The first step is to keenly evaluate your budget. When creating the ideal budget, purpose to pay the bills first and determine the order you are going to use to retire them. However, ensure you can pay for your essential needs first. I.e. foodstuff, rent, utilities and transport costs.
Then, you need to take care of your spending habits. It is important to regulate expenditures on entertainment, vacations and eating outside the house if you are struggling to pay your bills. Also, aim to keep your grocery bills low. Instead of buying so many groceries, consider eating fresh fruits and vegetables with affordable canned varieties, clipping coupons and buying on sale.
The goal is to follow an economic budget and reduce your spending as much as possible until you regain your financial stability.
Use What Is Left To Cure Your Debts
Determine the amount of money you are left with after paying for your basic needs. Measure this amount against the sum of all your outstanding debts for each month. If the two figures are equal or you have additional money after the settlement of the debts, then you are in a better financial position than you imagined. In this case, you will need to follow your budget and ensure you pay your loans every month. If they are less then perhaps look at utilising https://www.my-quickloan.co.uk/payday-loans.html
On the other hand, if you are rather broke every month after paying your debts, you will need to follow a different plan: reduce your budget even further, alter your lifestyle (e.g. consider sharing a home with a friend, family or moving to a more affordable house). Also, negotiate for a discounted payment plan with your creditors.
Seek For A Suitable Payment Plan
If you fail to remit the full debt service amount for the month, it is best to get in touch with your lenders and provide the details of your circumstances. Additionally, request the lenders for a brief reduction or deferment of the debt payments until your financial status gets better. It helps if you can write to the lenders explaining how much you can afford to pay every month to service your loan. Also, remember to attach a copy of your budget to clearly show your financial position.
Please note: These measures will not preserve your credit rating in any way but show your goodwill and intent to act in good faith to repay your loans. Additionally, they are likely to deter the lender from legally charging you for failure to pay your loans.
Ensure all your correspondence with the lender and debt collectors are well documented. Also, send all your letters through certified mail to generate proof that you indeed sent them.
Look For Additional Income Sources
If you start struggling with your bills, you have to explore alternative ways to make extra money as soon as you can. Apart from adjusting your lifestyle, you may have to take on an extra part-time job to generate the extra coin you need to meet your financial, needs and obligations.
At the same time, you need to significantly alter the outstanding bills for every month. For instance, selling that car that is weighing down on your budget can assist you to set up another income-generating activity. Identify all the items you need to sell on eBay or Craigslist to get money to pay for your expenses.
Ensure You Service Your Mortgage
Despite your hard financial status, it helps a lot if you can continue remitting the full mortgage payments, even when it means avoiding paying using your credit cards. This is because repossession of your house will only aggravate your situation. If you fail to pay your mortgage for some months, work hard to draw level, even if it means foregoing payment of other bills.
Also note: You can talk to your mortgage provider; they may lower your monthly mortgage payment or provide a refinancing option.
Other strategies you can use to deal with lenders include the following:
Remain proactive in your engagements: Many banks and credit card companies will not take adverse steps to recover their debt unless you are several months late. Nonetheless, if you contact them first informing them of your situation, they can assist you by reducing the payments or interest rate for some time.
Always be resilient and patient: When you call your creditors, be relaxed while you explain your financial circumstances. Remember to be polite and respectful as this will help you achieve more as opposed to raising your voice and unnecessarily interrupting them when they are talking. If you have to ask for the manager until you find someone to assist you, please do so.
Be firm on what you want: When you receive a call from your lender/s calmly explain your financial positions and propose how you intend to retire the debt. Do not allow anyone to harass you regardless of how much you owe them, such behavior is not acceptable or helpful; hang up the phone if such harassment occurs.
Follow your plan all through: It is difficult not having enough money for your needs, however, it is vital that you strictly follow your budget until your financial status improves. You may improve your finances by looking for a new job or altering your lifestyle.
You may sell off your house: If paying the mortgage on your home is proving a daunting task and the mortgage provider has failed to reduce your payments, consider selling your house before it is repossessed; it will reduce a lot of pressure on your finances and personal life.
