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What if You Can't Pay Ontime?
Sometimes it happens. Even when you truly try to manage your money well, you find yourself in a situation where you can't pay all your bills. Perhaps you've lost your job. Or maybe you've had some emergency expenses.
 
Don't panic.
 
Things may seem rough, but there are ways of handling the problem. There are things you can do immediately to limit the damage. You can also restructure your debt with the help of Credit Counselors.
 
Survival Rules
 
When creditors are phoning you and the money doesn't seem to stretch far enough, it's easy to loose your head. Here are a few simple rules to keep things from getting worse.
 
Survival Rule #1: Don't wait until things get totally out of hand. Take action as soon as you see a problem developing.
Survival Rule #2: Cut up those credit cards. Don't borrow on them to pay bills you can't pay. It will only escalate the problem.
Survival Rule #3: Don't bounce checks. Bouncing checks is a worse crime than not repaying a debt. If you can't pay, be honest with your creditor.
Survival Rule #4: Consider debt consolidation
Survival Rule #5: Call your creditor(s) and try to work something out. Your creditors know that if you have to declare bankruptcy, they may not see a single penny of the amount you owe them. They have a vested interest in making an arrangement with you that protects their money.
Survival Rutle #6: Go to a credit counselor.
Debt Consolidation
 
Debt consolidation is a way of reducing your total monthly payments on your outstanding loans and credit cards.
 
How it works
Debt consolidation is a loan to pay off other loans. You total your outstanding obligations and receive a lump sum to pay them off. You then have a new loan, the principal of which is the total of the previous obligations. You make monthly payments on that new loan essentially trading several payments a month for just one lower payment.
 
Things to be Aware of
While debt consolidation can make your monthly payments more manageable, it can also be the most costly type of loan. This is becuase you end up paying higher interest or paying over a longer term. This will increase the total amount it costs you to borrow. So you need to shop wisely for a debt consolidation loan.
You're also still vulnerable to another danger. Many people, after they've consolidated their debts to a comfortable level just go on borrowing. Before they know it, they're back where they started. Unless your're ready to put a curb on your spending, debt consolidation will not solve your financial truoubles.
 
Tips to Make Debt Consolidation Work in Your Favor
Tip 1: Call a halt to spending! Cut up those credit cards or put them away and don't use them except for emergencies
Tip 2: Shop wisely for debt consolidation loan. Look for an interest rate lower than what you're paying and a term no longer than your current term.