People think they'll never fall behind on their debt payments until the day they do. Although getting caught up on past due payments can feel like an impossible task, it is possible to get your finances back on track. Here are two options you can take advantage of to help you resolve your past due balances and start fixing your credit:
Ask About a Forbearance Program
Creditors don't like it when people fall behind on their debt payments. However, they like the idea of people completely eliminating their debts through bankruptcy even less. Therefore, many creditors have begun to offer forbearance programs that provide debtors who fall behind a few different options for getting caught up.
Most of the time, the program entails cutting the interest rate and stopping charging late fees for a period of time until the debtor completely pays the past due amount. In some cases, the creditor will actually reset the customer's account and place the past due amount at the end of the loan, essentially providing the person a fresh start.
As you can imagine, forbearance programs can quickly help you get your finances in order. Be aware, though; there are generally minimum requirements you must meet to qualify for the program (e.g., you must be three months past due or have had your account for a certain length of time). Additionally, you may only be able to make use of the program once or twice in your account lifetime. Still, if you're struggling to get from under a mountain of debt, it may be worth discussing this option with your creditors.
Offer to Settle the Debt
Another thing you can do is offer to settle the debt with the creditor. The primary benefit of this option is you can often settle for a portion of the total amount due. The biggest drawback, though, is the account will typically be closed, and you may not be eligible to open another account with the same creditor for several years.
However, this is a good option if you have quite a few debts you need to pay off or have experienced a setback that will negatively affect your finances for a long time (e.g., job loss). Be prepared for the credit card company to negotiate the amount you'll pay—plot twist: they'll want you to pay as much as possible—but stick to your guns. If you can only afford to pay 50 percent, then continue to insist on that. The company will eventually cave because it would rather get half than nothing at all.
For more tips on handling credit card debt or to discuss other options for eliminating the debt, such as filing bankruptcy, contact a law office like Cowan & Brady Law Offices Of.