Things You'll Need:
- A list of all of your bills and balances
- Most recent paystub
- Notebook
- Pen
- Checking account
- Some time to spend on the phone
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Step 1
Take a look at all of your bills. Seperate them in the following catagories: Home Expenses, Vechicle Expenses, Credit Cards, Medical, and Misc. Now take your notebook and write down each creditor in order of importance. Your home should always be number one. Your vehicle should be number 2. And then credit cards, Medical bills, and Misc. Make sure to write down your current balances next to each creditor. This will give you a real sense of the debt you are looking at.
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Step 2
Next, Look at your home and car loans. If you are behind on these call the loan company and ask if thety have a hardship program...most do. You will need to have your paystubs and utility bills handy.
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Step 3
Next, look at those credit card bills. Organize them from smallest balance to largest. Call the one with the smallest balance first, and then work your way up to the largest. Depending on how many you have, this may take you some time to complete. Keep in mind, paying off and settling all your debt will not happen overnight. It may take months and will depend greatly on the number of past due loans you have and your income level.
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Step 4
Call your first credit card company. You may have to press 0 to speak to a real live person. Tell them that you are wishing to settle the account. NOTE: A SETTLEMENT WILL SHOW ON YOUR CREDIT REPORT FOR UP TO 7 YEARS. EDUCATE YOURSELF FURTHER IF YOU ARE UNFAMILIAR WITH SETTLEMENTS. The rep will give you a list of options. If you wish you can ask to have this settlement broken down into 3-4 payments (for most companies). You caould save up to 70% off your balance.
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Step 5
Next, you will need to set up automatic payments with the cc company so have your checkbook ready and make sure you have the funds to support your automatic payments. Settlements, if done right can get you out of debt within a few months. However, if done incorrectly could further hurt your credit.
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Step 6
After you have set up your first credit card payment. Take a minute to re-examine your finances. If possible move onto the next credit card bill in your stack. Remember, smallest balances first and repeat the previous step.
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Step 7
Once you have settled all you can, check your remaining bills if any. Call the loan center and ask for hardship details just like you did for your house and car. You may be able to reduce your interest rate to the prime APR and stop the extra late fees.
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Step 8
Finally, Pay on time and keep to your word. In many cases you only get one shot at settlements and hardship programs. So plan ahead and make sure you dont over budget or over obligate yourself.
