Filed Under Debt Management
When you have debts that are spiralling out of control, you will be all too familiar with debt collection calls. For many people, an overwhelming sense of dread comes over them when the phone rings if they believe the person calling is a debt collector. This is no way to live. Essentially, you have two ways to approach this problem. First, you can ignore it and hope it goes away or second, you can address it head on and try to regain control over the situation. Of course, Debt Fix recommends the latter approach, but believe it or not most people tend to bury their head in the sand and hope the debt problem will go away or sort itself out. Of course the debt problem doesn’t go away and will not resolve itself.
The best approach to deal with this debt problem is to meet it head on. When a debt collector contacts you, they need to know 2 things:
For the person in debt, the reason for not being able to pay the bill is the most important thing however its fair to say that some debt collectors are apathetic. From their point of view they’ve heard every story imaginable from there being a death in the family, a car accident, sudden unemployment etc. This being the case it’s easy to see how a debt collector can become desensitised and/or sceptical.
When you receive a call from a debt collector, be prepared and stay calm. Never promise to pay an amount of money that you can’t afford. If you make a promise you can’t keep (just to get them off the phone), you will run the risk of the matter escalating.
Being prepared also means you should know your rights. There are laws to protect people from being intimidated or threatened by debt collectors. Also debt collectors have designated times to call and limitations on how often they can call you. Debt Fix has previously written articles about these laws in addition to some great Government websites detailing debt collection practices and consumer rights. One website in particular that has a wealth of information is www.fido.gov.au.
Debt collectors can often be abrupt and rude and it’s easy to understand how the relationship can break down. Despite this, it’s important to try to keep the relationship as positive as possible. If this is impossible, and the relationship breaks down, it may be necessary to seek the help of a Debt Management company like Debt Fix to act on your behalf. Debt Fix specialises in bridging the gap between people with unmanageable debts and their creditors.
Debt Fix is a company committed to helping people resolve their debt crisis. Contact Debt Fix today on 1300 332 834 or www.debtfix.com.au and you will be on your way to being debt free.
About the Author:
Nicholas Bregozzo is a personal debt management specialist and has advised people who have personal debt problems since 2000. During this period he has helped 1000s of people manage their debts and avoid Bankruptcy. Currently he works for Debt Fix with the objective of providing clear impartial advice and solutions for people in serious debt.
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Filed Under Debt Tips
From time to time, we all have unexpected expenses. The fridge may need repairs, the car may need new tyres, your kids may need excursion money or there may be an unexpected medical cost. Whatever the problem is, it’s likely put a strain on your finances if your budget is tight. In such situations, it’s common for bills to go unpaid.
But what should you do if you’re left a little short one week and you can’t pay your credit card on time? The answer is simple: tell your credit card company about the situation before the bill is due. If you don’t, you may find that it will cost you. When you speak with your credit card company, tell them the issue and why the bill will not be paid on time. It’s important to stay calm and let them know that you want to pay the bill and would if it had not been for the unexpected expense. The person on the other end of the phone should understand your predicament, because they hear this sort of thing all the time.
Tell them when you will bring the account back into order and ask them if there is any penalty for paying late. Some companies charge late fees, penalties and/or higher interested, if this is the case, ask them if they would waive the penalty charges - you never know unless you ask!! This is all well and good if the reason for being unable to pay your credit card on time is just a small, unexpected expense.
What happens though if the reason you cant pay your credit card due to something more serious, and it’s unlikely you will be able to come to a suitable arrangement with your credit card company? It might be that you’ve lost your job or your relationship with your partner has broken down or there has been a death in the family.
These sorts of situations happen and it’s important to know exactly what to do in such a circumstance. The first thing you should do is contact your credit card company as previously mentioned, and explain the issue to them. Explain to them what the circumstances are and how it will affect your ability to pay the debt. Ask them if they can offer any solution to help you in your time of crisis.
They might suggest you borrow money from friends and family or somehow refinance the debt. Whilst this approach is possible in some instances, for many this option is simply not available. In situations where refinancing the debt is possible, its essential that the new repayments are less than the repayments required under the existing contract, otherwise there is no benefit.
There are companies and organisations that specialise in helping people struggling with debt. There are many free government websites that offer terrific advice regarding debt management, budgeting and understanding your rights as a consumer. Its important to get as much information as you can about managing debts and speak to trusted experts.
Debt Fix offers people a wide range of solutions and helps hundreds of people in this same situation. Whilst there are many other companies that purport the same, very few can offer the “No Fix, No Pay” guarantee that Debt Fix is proud of. In other words, if Debt Fix can’t find a solution, then it’s clients will not be charged. This way, Debt Fix clients can be confident they are dealing with trusted professionals.
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Filed Under Debt Tips
It’ fair to say that most people have debt in one form or another. For instance, the debt might be a mortgage, car loan, credit card or line of credit. This is fine if the debt is manageable, however when debt gets out of hand problems start to arise. But how much is too much debt? The answer to this question may not be as difficult to answer as one might think.
Responsible debt management starts with knowing and understanding your exact financial position. It’s vital to have a clear understanding of your income and expenses. Naturally, the aim is to maximise the income and keep expenses to a minimum. In this regard, a budget will help track and keep spending in check as well as highlighting arrears where savings could potentially be made.
But how much is too much debt? Is there an exact way to measure whether or not you are holding too much debt? The answer is yes and it’ called the debt-to-income ratio.
To calculate your debt-to-income ratio, all you need to do is add up what you spend on a monthly basis towards your bad debt, and then divide it by your monthly income. To turn that figure into a percentage, multiply that figure by 100. The lower the percentage, the better. In previous articles we talked about the difference between good (equity) debt and bad (consumer) debt. A bad debt ratio above 10% is too high.
Once you have determined your debt position and decided to improve it, the next step is to review and address and budget issues that may exist. Debt Fix has many free tools and calculators including a useful budget planner to help inn this process.
After this, if the debts are still too high and there is no way income can be improved or savings made in the budget, it’ important to look at other options. For people with unmanageable debt, believe it or not there are many solutions available. The most important thing is that if you need to speak with someone about improving your situation then they should be an expert like an accountant, financial advisor or a company like Debt Fix.
As stated before and in other articles, there are many options available to people struggling with debt. Each option has it’s pro’s and con’s and its hard to know what is best approach. The answer to this question is easier than you might think. The right solution for you is the one where you are satisfied with the benefits and comfortable with the consequences.
In this way, before you make any decision, you need to be informed and have a clear understanding of the options. Taking control of the situation may sound like hard work, but it will lead to a better financial position and ultimately relieve stress.
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