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Rising Consumer Debts

Welcome to our article on consumer debt. Nowadays, consumer debt is a huge problem. Unemployment, illness, family problems, careless spending and many other problems can lead to a situation where you can't pay your bills. If bill collectors are calling, what do you do?

When you must delay paying a bill, contact the creditor and explain the situation. Don't wait until you get your creditor's attention by missing a payment. Explain the facts of your situation and that you must pay your mortgage, utilities and certain other expenses before paying this particular bill. Let the creditor know that you have not forgotten this debt and you will pay when you can. Be honest about your expectations for future income. Make sure that the creditor knows you will not be able to pay a collection agency any sooner than you can him. Since a creditor must pay the collection agency either a fee per debtor or a percentage of the amount recovered, it is to his advantage not to send a bill to a collector. Try to convince your creditor to wait until your situation gets better.

Examine all credit contracts. Pay on high-interest rate debt before lower-rate loans. Will you be charged late fees? Will these put you over your credit limit and cause you to be charged additional fees plus interest on these additional fees? Contact these creditors to try to make some adjustments. Don't wait until the original creditor sends a debt to a collector. Collectors don't negotiate readily.

Determine which of your consumer debts are secured and which are unsecured. Don't convert low-interest, unsecured loans to secured loans by taking a line-of-credit mortgage or other consolidation loan using collateral. (Collateral is property that can be taken by a creditor if you don't pay a debt as you agreed. Secured loans are loans that have collateral. Unsecured loans don't have property which can be repossessed.) A secured creditor can repossess the property that secures the debt. A landlord can evict you, a mortgage holder can take the property that is mortgaged, and a utility company can cut off service .

Are you struggling to pay off serious debt? You might have to look into various debt solutions available, ranging from an IVA and a Consolidation Loan to Bankruptcy or Debt Management. Don't leave resolving your money problems to luck - get impartial and expert debt advice now!