If you reduce your debt you can improve your cash flow and this automatically will make your credit report better. First list out all your debts and identify and prioritize them that which has to be paid first and which is next. The debt who is going to effect your financial life seriously, the one who leads the creditor to take back the good,item or property and which one will effect your credit report seriously is the one who has to be given priority.
For example
1.Paying the current bill shall be priority as they will cut the power if you have not paid them in time.
2. Your doctor may refuse to see you if you have not paid the due and any way in emergency you can find another doctor and so it is not that much in the first list of repaying(Dear doctors please excuse me for this comment and it is in the prospect of the poor middle class gentle man who is in financial trouble) .
3.Mortgage can be delayed for two months and banks are not going to go for foreclosure as it is a time consuming and costly process.
4.Your credit cards can be in the list of last to repay and they make only lot of noise for a short time and they can not go for a court in two months .
Negotiate with Creditor for small repayments or temporarily halt
Check out the minimum amount that you need to pay for each important case to come out of the soup and pay it . Inform to creditors about the inability to pay back the dues in time and explain the real reason like you are laid off from the job or you got medical bills to pay for your family and give the reason that is good for them to considerate. Tell them that you have intention to pay back all the due in a short time when the situation is improved. Ask them either differ the payments temporarily or make it small so that you can pay immediately.
Don't agree for the payment that you can not afford at that time and keep calling and taking to higher level officers to get the required concessions. Tell him about your repayment plans and ask them to consider removing negative remarks in credit report and that eventually improves your credit score. Give him a plan like I will pay the agreed amount for three months and get the offer like make the credit report neutral and continue this process for three more months to get positive report.This negotiations may be a difficult job for you but it will save you from future problems by giving better credit score.
Most creditor's love this way of coming to the table as they start getting the money they need and they need to proceed for legal help which in turn also saves their money. They don't prefer to take back the hypothesized goods or vehicle as they have to find a place to hold it,auction it and people try to offer them less money for the good.
Special recommendations:
Rent house solutions:
1. ask for a deferment of payment for a short term .
2.Or give a offer for re innovation which can be done with a little bit of less money and buy some time to spend that money.
3.Request for a small reduction of rent.
4.Ask the land lard to allow a new inmate who can offer a portion of money so that your rent will be less.
5.Request the owner to accept a partial payment until things are settled.
Mortgage Solutions
1.Ask the lender for late payment and request him to wave off the late fee.
2.Look for the option of paying only interest for a short time until things are settled.
3.Fore carouser is long and time taking procedure and you will get some time to breathe and think.
4. Look for refinance with lower interest rates or longer time repayment options .
5.Consider even selling it out if it turned into costly over the time .
6.Give a portion of time for rent and get some cake for mortgage.
7.Give to rent completely and stay at a cheaper home until every thing is settled.
Service Provider Bills like doctors,lawyers and dry cleaners will have generally three cycle choice before they go for collection agency. If these are are run by small people,they would like to have a agreement for beginning the repayment with a small amount. Call to them and explain your problem and ask for a smaller repayment.
Insurance Polices will loose their coverage once if you are unable to pay the money on time and generally they are not open for negotiations. Any way these days of privatization started a big competition and no one would like to loose a good customer.Make a call and explain your problem and try your best for either smaller repayment or temporary deferment of repayment.
In the case of Utility bills switch your self for higher options to lower or budget options. This will save your money and burden will be reduced a bit and you are on the way learning the savings.
Try selling your Costly Car and get a cheap used car until things are settled.
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