How I Got Out of Debt How You Can Improve Your Credit Score Here ph
The hardest part of getting out of debt was just coming to terms with the fact that we were starting to get over our heads and were living above our means. In the process of finding out how exactly we arrived at the point that we were at the main issue was that we were awarded credit by banks that we had no business qualifying for. I am not going to turn this article into where to point fingers because at the end of the day we had to take accountability for our own situation.
We had accumulated debt in a number of different ways. Without question the bulk of our debt was owed to credit cards and we got to the point in our debt that we were making no headway on paying any of the principle on any of our credit cards. We were just spinning our wheels and with each late payment the interest was going up and up. We even got to the point where we were trying to pay off one credit card with a different one. At this point we realized something had to be done. The first step; setting a strict budget: The true first step is to shred your credit cards and only work off of debit cards, checks or cash. This step is not only important to control where your money goes but it is essential when you start talking to your creditors. The first thing they want to know before they start working with you is how much money is coming in and where is it going. Setting a budget for us was difficult because most of my income comes from a commission based job. Nevertheless, this was something that had to be done so if one week my commissions were low certain things had to suffer. You have to set priorities when creating a budget, entertainment being one of them and it was always the first that had to suffer. Do not even go to another step before creating a realistic budget. Contact Your Creditors: We had two levels of debt with our credit cards. The smaller credit card balances had a balance of three to five thousand and the bigger ones were five thousand and greater. What we decided to do is go through the smaller ones one by one and stop making payments and negotiate a charge off for thirty to forty cents on the dollar. Typically doing it this way you will receive a 1099 for the charged off amounts. The larger cards we contacted and negotiated a reasonable payment plan. There are non profit credit counselors that can help with this step. Credit Improving Attorney:
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After we got somewhat back on how feet we contacted a lawyer to go through our records and clean up some of our bad credit that can be removed from our report. After you do these steps, be responsible and live within your means. I cannot tell you the weight that is lifted off of you when you a managing reasonable debt. Hopefully these tips have been helpful. What do you think? Tell me and I'll send you a free gift.
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Do's and Dont's of the Credit Card Game Here pf Futhermore: How I Got Out of Debt
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