Dealing with Creditors While Unemployed
When you're unemployed, dealing with creditors can be a brutal experience. You're already stressed and wondering about your next paycheck. Sometimes, unemployment compensation isn't even an option. You might be wondering how you're going to afford the cost of survival, much less maintain your credit rating or calculating for loan repayments. While you may not be able to make any drastic changes to your financial situation, but you have to recognize that you do have a credit situation to deal with do your best to keep your credit record in good shape.
Before you panic and start avoiding answering phone calls or dread looking in the mailbox or past due bills, make the choice to be proactive. Creditors appreciate it when you contact them. Some creditors are even willing to lower payments or put payments on the end of our payment plan. It's best to be upfront with your creditors if you want them to be upfront with you. You're going to be able to talk to them with concise and accurate information as soon as you review your budget and learn what you're capable of financially.
Make a Budget
You may already have a budget in place, but as your financial situation changes, your budget I likely to change a well. You may need to make some adjustments to change with it. If you want to work on your credit record and stay in good standing, you're going to need to come up with a game plan, starting with the amount that you can afford to pay out a month. You're going to look at this amount and start to prioritize how you handle it.
Prioritize your lifestyle. Make a list of all your current debts. Add up the monthly payments for everything and take this amount away from your budget. Even if you do this and you come up with some money left over, you're still going to make some changes to your budget so you can plan ahead. Since you have no guaranteed income you need to be able to stretch what you do have so you can be prepared to keep your affairs in order with as little damage to your credit as is possible.
Remove debts without contract
n other words, don't cancel a contract if you don't have to. Canceling a contract can sometimes cost you more than you owe in the long run and the cancellation fee will be requested immediately. You might want to cancel things like prepaid cell phones that don't have a contract and have no impact on your credit rating. You might also consider cancelling memberships that you don't need. Sometimes, you can even put your account on hold so you aren't cancelling a contract, but you are reducing your monthly costs in areas that you don't have to have. You really don't need memberships that you can't afford to be active in anyhow.
Reduce plans and consult creditors. Now that you have a list of your debts and you've trimmed them down a bit, contact your creditors as needed. Most creditors are willing to work with you in such a way as to not ruin your credit score. It is possible to reduce payments and interest rates, but your creditors are more likely to be willing to do this if you keep them informed and don't wait for them to contact you. Even if you do wait, just be honest with them when they call. The more credit history you have with lenders, the more willing they are to work with you.
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State Guides to Credit Card Laws
- North Carolina
- West Virginia