How to Bring Your Accounts Current and Avoid Bankruptcy

As a former employee of a major financial institute, I saw my share of customers falling further and further behind in their payments. Unfortunately, our account was not an isolated case. If they were behind with us, it was very likely they were behind in their other accounts as well. Though I could often help them bring their account with us current, I preferred to make it possible for them to bring ALL of their accounts current. It prevented a monthly game of "who is going to get my money this month?" by the customer.

The follow are some steps that may be used to assist in getting yourself up to date quickly and without having to file for bankruptcy.

Things You'll Need

• Regular income of some sort.
• Access to a telephone.
• Phone numbers for your creditors.

Instructions

1. MAKING A LIST OF EXPENSES AND INCOME: You'll first have to see where your money is going each month. You may think you know, but people are often surprised when they sit down and make a list at the number of trivial purchases they make each month. Even if you are frugal, it's important to make a list of your monthly expenditures, not only to give yourself a visual overview, but you'll also need it when speaking with your creditors.

   Make a list of all income that comes into the household as well. Break it down by daily, weekly, monthly, quarterly, etc.

2. CONTACTING YOUR CREDITORS: Once you have an outline of your bills and your income, it's time to contact your creditors. Many creditors have their own individual programs that they can set you up with depending upon your situation. Some programs can be set up right over the phone, while others require formal paperwork to be filled out and it goes through an approval process. These programs often drop the monthly payment amount for a span of time until you can hopefully get back on your feet. Some programs allow you extensions if needed.

3. CONSUMER CREDIT COUNSELING SERVICE (CCCS)/ Money Management International (MMI) OR SOME OTHER FINANCIAL ASSISTANCE PROGRAM: This has helped prevent many individuals from filing bankruptcy and are valuable organizations for both the customer and the financial institution. The way it works is that you would speak with a counselor either over the phone or via the internet to discuss your financial situation. They will negotiate with your creditors a lower monthly payment. You would send the debt counseling organization a monthly payment and they would disburse it to your creditors. The benefits of this program is that it brings your accounts up to date, stops any collection calls and is either free or they charge a small fee for their services. You would remain on this program until your debt is paid off.

   NOTE: When researching counseling programs, be careful that you aren't stuck paying high fees. As the popularity of these programs has increased, there have been some organizations out to make money off of people like yourselves. Your best option would be to call your local non-profit Consumer Credit Counseling Service/Money Management International office or go online at www.moneymanagement.org and allow them to put you in touch with a reputable organization to assist you with your financial needs.

4. SPEAKING WITH AN ATTORNEY ABOUT OTHER OPTIONS RATHER THEN FILING BANKRUPTCY: Though I'm sure there are some attorney's who may consider educating a client on other options other then bankruptcy, it is my experience that clients will be told that bankruptcy is their "best option" or "only option". This may certainly be the case. Sometimes, unfortunately, there isn't any other options and filing is necessary. In that case, certainly use the services of the attorney to file. However, I have witnessed situations in which bankruptcy could have been avoided had they known of their other options. Thus, I would try one of these other options before seeking the advice of an attorney.

Tips & Warnings

• It's difficult to acknowledge and admit to someone that you're having difficulty making your monthly payments. However, the sooner you seek assistance the better chance you have at preserving your credit. There are many others who are in the same situation; and there are people willing to assist you in resolving your financial difficulties. One of the worst things you can do is ignore the problem and hope it goes away.