One of the best tools for repairing credit is to stop, think, and listen. If you
are in debt, you need to stop and think about your situation and stay alert to
the activities on your credit-report. In this article, we are going to examine
displus points and plus points available to you as the borrower.
Let's take a look
at what can happen when you have bad credit as well as what you can do to
protect your self from the creditors and collection agencies. If you are
obligated to pay child support, college tuitions, income tax, the IRS can take
your money. This means each year that you miss payments are at default the IRS
will deduct your entire tax refund to repay the debt. The IRS is obligated to
contact you before deducting any fees from your tax refunds.
If you miss
payments on Insurance Policies and you have conditions stipulated on that policy
you may be at risk of loosing your property. If you have late bills on
utilities, under law, (in most states) the utility providers can't cut your
heat during particular months stated in the law regardless of nonpayment's. Most
states are required to give you a written notice before they can disconnect your
service. This will give you time to find the funds to pay toward your utilities.
Likewise, some insurance policies will allow you a grace period toward your
insurance. Anytime you are allowed time it is time to stop, think and listen. If
you take the time to review your bills and funds and come to the conclusion you
don't have enough to pay the entire amount of the bill, you might get away with
minimal balance temporarily. Paying something toward your bill is better than
avoiding your obligations.
Another point you want to keep in mind is that when
creditors write off a debt you may be required to pay taxes on the bill. Once a
creditor writes off a debt it is sent to the IRS for review and if they choose
to do so, you will still pay on that bill at the end of the year. So the best
bet is when you get the first letter in the mail asking you to pay your bill is
to write the lender or creditor and explain your situation politely and ask for
an extension on payments. The truth is most creditors that lend or extend you
credit hope that you are a returning customer and only suffering temporarily. If
you can keep the creditors on your side this is your best solution for avoiding
Another suggestion is to send in minimal payments on current
bills that are overdue. Your next bill will be steep but if you keep sending
minimal payments til you are caught up, your name won't go in a credit
bureau. If creditors recommend that you send payment immediately to avoid
hassles, disregard the creditor.
The creditor is doing nothing more but adding more expense to your debt. If you
have a bill and have money to make payment tell the creditor that you will send
the money through regular mail immediately. Do not waste money on services that
will charge you to send a bill. If you contact the creditors and they simply
deny you the opportunity to extend your debt or ask for proof of your situation,
it is time to make contact with a Debt Counselor. The Debt Counselor will work
on your behalf to resolve the issue.
Do not argue or use foul language when you are addressing your debts, since this
will only add more problems. If you have a bill, more than the time allowed for
pay it is determining that you DON'T contact the creditors or collection
agencies. This is only letting the agencies know that you realize you owe the
debt. By acknowledging, the debt will open up a new debt.
and creditors pose a threat to millions of people each day, so the key to
solving the problem is finding a way to resolve the problem. Stop, think and listen
before you act.