Early Signs you Need Debt Management

July 19th, 2009 | by admin |

Like any disease (which is exactly what debt is), the best way to fight it, is to prevent it rather than cure it. The number of bankruptcies is growing astronomically and one should realize that it is something that could happen to any one of us, unless we are prepared. This can be done by being able to tell the signs of a coming debt trap and immediately take corrective measures.

Here are a few signs to warn you to change your course before it becomes too late:-

1.Inadequate or No Health Coverage
Medical bills are one of the five largest factors that cause bankruptcy. Make sure that you do not fall to it. Make sure that you are adequately covered so that you do not fall prey to any unforeseen medical expense, for most medical expenses are unforeseen.

2.Maxing out your Credit Cards
Credit card debt is one of the other big five reasons that people fall into the dept trap. If you have reached the limit on any (or dare I say all!) of your credit cards, then you need to stop using credit cards and pay it off immediately.

3.Charging more to you Credit Card than you can pay off
Credit cards have invited the misappropriation of funds by just about every individual who has them. The golden rule for using a credit card is to make sure that you pay off the entire outstanding every month.

4.Paying the minimum balance on your Credit Cards
If you find yourself paying only the minimum dues on your credit cards you will find yourself paying more and more interest. You need to make sure you can pay as much as possible if not the entire amount as soon as possible.

5.Improper use of Home Equity Loans
The only advisable time to take a home equity loan is when you are using the funds for asset building by way of home improvement. For all other times, wait out the urge.

6.No Emergency Funds
If you do not have at least three to six months of living expenses in an emergency fund which can be easily liquidated, you are setting yourself up for a big problem.

7.Tax lien, foreclosure on your home or repossession of a car
Needless to say, if any of these happen to you then it is a clear sign of financial mismanagement. You need to go back and understand why this happened and how not to let it repeat itself in the future.

Adamheist
http://www.articlesbase.com/business-articles/early-signs-you-need-debt-management-79623.html

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  1. 4 Responses to “Early Signs you Need Debt Management”

  2. By Matt on Jul 19, 2009 | Reply

    What do I do if the debt management company doesn’t make a payment for me on time? Can I sue them?
    In early 2006, I signed up with a company to consolidate my credit card debt. The full amount was around $12,000, and that’s spread out over six cards.

    This year I started making a good bit more money, so, in May, I called the debt management company and asked if they’d take an EXTRA payment from me that month, as soon as possible, in order to knock off most of the debt on two credit cards.

    I thought I was clear and repetitive, but somehow they managed to ONLY pay those two cards that month of May and none of the others.

    Now Bank of America has told me that this has been negatively reported to the credit bureau.

    The debt management company, who made the error, is telling me, in so many words, that it’s my fault and that there’s nothing they can do. They tell me to call Bank of America, while Bank of America just shrugs and says, "We just report what comes in and what doesn’t."

    I asked for a call back from a supervisor at the debt management company, but there’s been none since I started asking last week.

    I threatened to sue them, and they told me, in so many words, that that is not an option.

    Can someone make a mistake that injures your credit rating and not be held accountable? I never missed a payment until now.

  3. By toocan on Jul 19, 2009 | Reply

    most likely part of your contract had an arbitration agreement that said you agreed not to sue them, but if you had a dispute, you would arbitrate. so, be prepared to fly to the city that the loan company’s corporate office is in, pay $2,000-$3,000 for you share of the arbitration fee, tell the arbitrator your side of the story, listen to the loan company tell their side, and see what the arbitrator decides (which is unappealable and legally binding). but keep in mind, you are the out of towner and the arbitrator pays the bills by arbitrating for the loan company, so whose side do you think he or she is on. sorry but your hosed
    References :

  4. By Shane on Jul 19, 2009 | Reply

    There responsible and they better fix that mess they made with Bank of America for you. There is what’s called the New Uniform Debt – Managment Services Act. Basically what has happened to you has happened to many other people and worse. You can report them to the Federal Trade Commission to begin an investigation. If they find they committed any wrong the FTC will take care of it for you. For the record next time you want to change the terms of your agreement with anybody make sure to do it in writing and send it certified mail. They can always say they never spoke to you. You can definitely take them to court but try the FTC first.
    References :

  5. By adamfullman on Jul 19, 2009 | Reply

    Your relationship with the debt management company is controlled by the contract that you signed with them. I would have to see the contract to tell you more, but most of these contracts have an arbitration provision. This means that when you signed the contract you likely agreed that you would not sue them, but would instead submit the dispute to arbitration. The bigger issue here is one of damages. Until you have been denied credit due to the late payment being reported on your credit report, you have limited damages to prove up in a lawsuit. Adam Fullman
    References :

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