Bankruptcy-Averting Tips You Can’t Afford to Ignore

Your financial outlook is bleak.  You’re $8,000 behind on your credit card payments.  Five of your eight credit cards have tanked, the remaining three sputtering, and are already being used for groceries.  Your mortgage debt has been turned over to collection, and you’ve started to miss out on your car loan.

As bad as your situation has become, it can deteriorate to something  even worse if you ignore some must-do in these difficult times.  Here are some of them:

Don’t Leave Late Notices Unopened

A late notice is a written reminder from a creditor calling your attention to your overdue account which you might have overlooked.  That’s how everyone else would  describe it.  It’s a sarcastic, thinly-disguised threat promising you more pain than Gehenna  can inflict if you’re to describe it.   Whichever definition is used, and whatever violent reaction the piece of paper elicits in you, it’s important that you open it and read it, and not throw it straight into the trash can unopened.  It might be a notice to garnish your wages, in which case you wouldn’t know about a court order requiring your employer to deduct from your wages funds to pay a creditor.  That’d be very embarrassing, especially if the process  server – a messenger who personally delivers the official document relating to a lawsuit or other legal action –pops up at your  place of work.  

You will need the information in the late notices should you decide to file bankruptcy, so it’s best to keep them.  Besides, it’s a psychological war where the first one who blinks loses.  If you choose not to confront your fear of the notices, you blink.  You lose.

Answer the Phone

Yes, answer it, even if your first impulse is to run away every time the phone rings.  Remember behind you stands the might of the United States government in the form of the Fair Debt Collection Practices Act which details what collectors can, and cannot,  do. Which means that no matter how much the collector wants to strangle you even only with words, he will have to bide his time, wait till civil rights are suspended in the United States before he can  twist your arm.

Don’t Make Promises You Can’t Keep

There will be times you’ll be tempted to make promises you can’t keep just to get a collector off your back.  Don’t give in to the temptation.  Unsecured debts are paid last, don’t change the order of your priorities merely because one collector shouts the loudest.  Do that, and you night end up giving up your home.

Don’t issue checks when you don’t have enough funds to cover it. You’ll end up in a worse situation if the bank stamps on your check “NSF” –nonsufficient funds.  Banks charge a fee, and if that fee is deducted form your account, other checks which you might have written can topple like dominoes.  Remember also that writing a check that bounces is a criminal offense, something that you wouldn’t want added to your present litany of woes.

Don’t issue postdated checks either.  If deposited before the date on the check, no bank will accept it – that is, if the check passes through a human teller.  But if the check is run through a bank’s computer system, the computer won’t be able to tell the difference, and you’d be saddled with the NSF fee.

There’s only one sure way when writing checks:  write the check only if you have the funds to cover it.

Know Your Bank Balance

This almost goes without saying. The incredible fact is that there are people who are afraid to look at their bank balance in the same way that some overweight people dread looking at a weighing scale. This is crazy. It’s precisely when income comes in dips and dabs that one should keep an eye on his bank balance, and make sure that every transaction is recorded. This is important for two reasons. First, it helps you shepherd whatever meager funds you have, allocating them according to a system of priorities. Second, it can show you opportunities for cutting on expenditures.

Get Professional Help

It might be a good idea to get yourself professional help. Advisers with debt consolidation calculators abound who can give credit card counseling debt consolidation and other financial advice.