How to Pay Off Creditors

If you have ever gotten yourself into financial trouble, you know that your creditors are the first people to pick up on the problem. Although creditor calls can be frustrating, ignoring the problem won't make them go away. You must make a plan to take care of you and your family, cut unnecessary expenses and negotiate with your creditors to pay off your debt.

Difficulty: Moderately Easy

Instructions

1. Take care of your family's basic needs first. Make sure you have food, electricity and heat. If you have to get rid of the cable for a while until you get back on your feet, than do it.

2. Pay your mortgage or rent payment next. You must have a place to live, and if your current home is the best option, you cannot default on mortgage or rent payments.

3. Consider options for lowering your mortgage or rent if your housing cost makes it impossible to pay other debts.

4. Make secured loan payments before unsecured loan payments, but weigh their importance in the long run. A car may be your only means of transportation, but maybe buying a cheaper car or using public transportation for a while is a possibility.

5. Negotiate with your other creditors and ask about special programs to help pay down your unsecured loans. Credit card companies are usually willing to work with you on payment plans.

6. Look into debt consolidation loans if you are in the hole with many creditors. One payment with a better interest rate is much easier to handle and pay off than several payments with higher rates.

Tips & Warnings

• If one of your credit cards has a lower interest rate with an available balance, transfer your other credit cards to this card. Even if you can't transfer the entire balance from the higher interest rate card, the portion you transfer can make a difference in your ability to pay down your debt.

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