If you are unable to make your monthly payments on credit cards or other debts, there are steps you can take to minimize the potential negative impact on your credit. While ignoring the situation may feel like the easiest, most welcome alternative, that’s the last thing you want to do. Instead, take these proactive steps to keep the line of communication open with creditors in a thoughtful, controlled manner that will maximize the potential for both stress and debt relief.
- Hide in Plain Sight. The last thing you want to do is ignore a creditor’s attempts to collect from you. The harder you are to reach, the more extreme measures they will take to demand your attention, which can include lawsuits. Now, this need not mean you engage in lengthy conversations with creditors; only that you respond to phone calls and/or letters with the truth – you cannot afford to make payments to them right now.
- Write Letters of Validation. If a creditor cannot prove you owe a debt, then you are not legally required to pay it. So, send your creditor our debt validation letter. If they cannot provide such proof, you are under no legal obligation to pay.
- Send Everything Via Certified Mail. All the letter-writing in the world may not do you a bit of good if you cannot prove their receipt. Certified mail makes sure you can.
- Record All Communications. Record all of your phone conversations with creditors and keep copies of all written correspondence, and inform them of such. This should help deter them from crossing lines or give you legal legs to stand on if and when they violate your rights.
- Use a Pre-Paid Phone. There are few things more maddening than fielding calls from creditors at all hours of the day, every day. Control some of the madness by containing all of your creditor calls via one pre-paid phone number. Of course, this will require you to change your regular phone number through which you have already been communicating. To prevent them from getting your new one, try a pre-paid phone as well for friends and family.
- Cancel Automatic Payments. If you have automatic bank withdrawals set up with creditors, cancel them immediately. If you still see debits coming out of your account, you can always close that account and open a new one.
- Move Money From Checking and Savings Account With Banks to Whom You Owe Money. Banks have the legal right to seize funds from your checking or savings account if you also have a line of unpaid credit through the said bank, so don’t give them that opportunity.
Incorporating one or more of these tactics can buy you some time with creditors while you are trying to fix your credit. These will not make the problem go away completely, but they will give you a little wiggle room so you can focus your attention on repairing your credit and/or putting together the funds you need to pay off these debts.