When an outstanding debt exists, you always want to try and deal with the original creditor. A department store or doctor will likely work with you to develop a plan you can afford to pay back your debt.

Another option when you can not pay your bills in full is to enroll in a debt consolidation program and get your debt negotiated with your creditors and see whether they will accept less than what the full payment is. To engage into negotiation you need to write a letter to the creditor explaining that you would like to settle your account in full, but can not. Your letter should go on to offer a settlement for an amount less than you owe. However, a debt consolidation program will not stop creditors from contacting you. That is one of the negatives of debt consolidation.

**The FTC offers more information about what consumer rights are with creditors and debt.

You wonder why a creditor would accept your offer? If you explain that you have no choice but to declare bankruptcy if the offer is not accepted, they will have little choice to accept. If you declare bankruptcy, they will get nothing what you owe them.

Unsecured debts such as credit cards, doctor and legal bills, and bounced checks get wiped out in a Chapter 7 bankruptcy. You can learn more about whether or not bankruptcy is your best option.

If you don't pay your bills, and filing bankruptcy is not an option, your account is going to be sent to a collection agency. If this is the case, expect your credit rating to be adversely effected. In addition, you are going to be contacted relentlessly by the collector. You have rights though under these circumstances. Get more info about how to deal with deal with collection agencies.

Managing Debt
Personal Loans for Paying Off Credit Cards
Locating a Financial Counselor
Credit Report FAQ
Good Debt vs. Bad Debt
Changes In Spending Habits
Early Warning Signs of Debt Trouble
Planning a Budget is a Good Strategy
Budgeting Tips
Fixed Expense vs. Discretionary Expenses
Problems With Overspending
Dealing With Collection Agencies
How to Save Money If You Have Kids
How to Save Money by Changing the Way You Buy Food
What is Debt Consolidation?
Paying Off Credit Card Debt
What is Debt-to-Income?





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