DEALING WITH CREDITORS
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.