Getting Out of Debt

Unpaid debt is a problem that only gets worse the longer it continues. The good news is that there are ways of getting out from under a pile of overdue payments.

Consolidating Loans
Consolidating several loans into a single loan may decrease your overall monthly interest, as well as simplifying your repayment process and making it easier to track how much you owe. There are several methods to consolidate your debt, from transferring the debt to a credit card which has a zero or low rate—be sure you pay this kind off before the rates go up—to loans specifically for consolidation. Another common method is taking a loan against an asset, such as a home equity loan. Do some research to find out what might be available to you and consider which of your options fits you best.

Credit Counseling
There are agencies which can help you manage your debt through four forms of assistance:

Review your debt load and income
Help you set up a realistic personal budget
Negotiate with creditors to reduce payments on bills
Plan for your future expenses

Your Rights
Creditors do not have the right to harass you. Collectors are generally banned from the following:

The use of threat of violence or other criminal means to harm a person or that person’s reputation or property
The use of obscene or abusive language
Repeated calls with intent to annoy or harass
False affiliation with the government, including the use of a badge or uniform
Threat of arrest
Communication at unusual or inconvenient places and times
Communication with third parties without debtor consent

Bankruptcy
As a last resort, legal bankruptcy may be a way to eliminate debts or repay them under court protection and supervision, although depending on the laws or regulations which govern your location, child support payments, alimony, fines, taxes, and some student loan obligations may not be eliminated. Bankruptcy can possibly affect your credit rating, ability to buy or rent a home, and will likely result in higher interest rates on future loans and make you less attractive to future potential creditors.