Personal debt is at an all-time high. With the economic recession and skyrocketing unemployment rate, many Americans are falling behind on their mortgages, car payments, credit card bills and personal loans. There are several options available to you to get control of your debt. Some are do-it-yourself fixes and others may require the assistance of professional credit counselors or debt professionals. Here is some basic information so that you can make the best possible decision to wrangle in that debt yourself.

Just a Touch Behind – You missed last month’s payment and now you have received your new statement with an additional charge – a late payment fee. Great, you have now turned a missed $20.00 minimum monthly payment into an additional $60.00 due after late fees and a possible over the limit charge. Pick up the phone and call them – now. If at all possible, make a payment, any payment before you hit the 30-day late mark. As far as credit reporting is concerned, you have a little bit of grace when it comes to what is reported as a “late” payment.

A Few Months Behind – Yes, you can still save it at this point. You will want to rectify this type of situation as soon as you can and before it goes to a collection agency. Answer their call or pick up the phone and start dialing. You will be amazed at how understanding some, and I emphasize “some”, of your creditors can be. Certain credit companies have been known to waive more than one late fee in order to secure a payment to bring the account current. If you can pull it off, a higher payment amount offer will often get a larger write-off of fees.

Bones in Your Closet – I owe so many old debts, I don’t know where to begin. The first thing that you will want to do in this case is pull a credit report. You can get one free credit report a year from TransUnion, Equifax or Experian; or order online from a single credit agency or all three credit reporting agencies for a fee. Be very careful to read terms and conditions of any company offering a free credit report. This is often part of a credit monitoring service that will charge you a monthly fee if you don’t cancel your trial subscription to get the free credit report before it is due. If your credit repair is a top priority now and you have the money, they are a great tool for many people. But if it just seems like a good idea because they have great ads, the last thing you may need is a new bill.

Your credit report will contain a full history of any accounts you have ever had, opened or closed and when, how many payments were on time or late and any balances owed and the creditor that holds the loan. One additional reminder while you have this valuable report in your hand, you need to check it for accuracy. Then, double-check it for accuracy. Sure, maybe you haven’t paid your debts in five years, but make sure that the ones you are responsible for are truly yours.

If you have older debt, there is good news for you – yes, good news. They are usually willing to settle for a much lower percent of the total debt than newer debts. And this is why: let’s say you quit paying a $300.00 credit card 5 years ago. By the time the credit card company threw up their hands and decided to write your balance off, you have accumulated additional interest charges; late fees; possible over-the-limit fees and additional interest on top of that.

The End is Very Near – Maybe you have just been scraping by, but foresee late payments and missed payments in the very near future. The best thing that you can do in this situation is to be proactive. Call your creditors and explain your hardship. Try to negotiate a lower interest rate. Anymore, creditors are being a little more flexible with keeping you as a customer and losing some percentage points versus not getting any money at all. If you just need a little breathing room, such as a break for a month, ask them if they can do a deferred payment for you. The payment is essentially “skipped” for one month. Interest and fees of the deferred payment will still apply. Most creditors, no matter what kind of creditor, will generally grant you one deferred payment annually though some will only offer this as a one-time deal.

And yes, that says most creditors – mortgage companies, auto finance companies, credit card companies and even the loan shark payday advance companies are often willing to extend a deferred payment to you. This is just an option that not many of these companies are willing to advertise.

It may seem difficult when dealing with credit card or mortgage companies. Many of the companies themselves are greatly affected by the current economy and unemployment. It is in your best interest to do what you can to take care of your debt before it gets out of control.

Author Bio: Kris H Smith is one of 6 siblings that are all published and work in different career fields. Kris’ expertise deals with credit report education and responsible credit card usage and debt control.

Category: Finances
Keywords: debt, credit card debt, debt settlement, credit, credit report, credit cards, credit card