The 7 Stages of Debt
Why Debt Is Like Drug Addiction
Preparing for Financial Disaster
One of the biggest mistakes I have seen consumers make once they get into debt trouble is avoiding creditors. I used to be one of those "avoiders," but things changed one day when I received a lay-off slip from my job. I was single, had two kids, bills to pay and suddenly no income to pay them. I gave myself the weekend for my pity party, but on Monday morning, I knew I had to suck it up and make some phone calls.
I called my credit card companies and explained my situation to them. I told them I had lost my job. Therefore, I had no money to pay them and I wasnít sure at what point I would have an income again. To my surprise, they both worked out a payment plan that I could afford, and one that would also allow them to get their money. One of them actually stopped any accruing interest on the card for six months. Of course, I couldnít use the cards until I had proven again that I could meet my financial obligations with them, but why did I need to use them anyway? I did not want to create any more debt for myself that I could not get out from under.
I went to my local credit union where my car was financed and explained things to them. Again, I told my story and the credit union offered me an extension on my loan. If you are unfamiliar with that, as I was at the time, an extension is when they allow you to skip up to two months of a loan and the creditor will "tack" those two skipped payments onto the end of your loan. While this is not always a good idea for everyone, I felt sure I would have a paying job within the next two months, allowing me to pick up the payments where they were left off. In the end, I did have to pay two extra months on my car, but I was also able to feed my kids during the time I was out of work. That was a trade-off that worked for me at the time.
If I had not made the calls or visits that I did, I would have lost my car, all of my bills would have been turned over to a collection agency and I would have faced eviction from my apartment.
There is no worse feeling than being afraid to answer your phone when it rings or your door when someone knocks or than laying awake at night wondering if a tow truck will take your car away because you havenít been able to make the payments on it. For your own peace of mind, swallow that fear (or pride or whatever is stopping you) and make the calls that need to be made. You will feel better when you can let out a sigh of relief and your creditors will feel better about you.
I found during my experience that creditors really donít want to take the things we have or turn anyone over to a collection agency. Contrary to what we sometimes believe, the people who are making those calls are human too and my bet is most of them have been there and done that. Things happen that we canít always avoid, but avoiding the situation of paying those bills will only make things worse in the long run.
"My Story" is a regular feature of The Dollar Stretcher. If you have a story that could help save time or money, please send it by email to MyStory@stretcher.com.
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