However, missed payments can result in more than just late fees. When deciding whether to pay off these debts, consider various factors, such as your relationship with the creditor and whether the creditor has initiated collection efforts. If you’ve ever defaulted on a debt, you’re probably aware that creditors get a bit nervous when you stop paying it. A debt consolidation loan can enable you to repay your debts so that you only have to make a monthly payment.
What can I do if I can’t pay my debts?
If interest rates are low, consider refinancing your mortgage, whether with your current lender or with a new lender. The Department of Housing and Urban Development has implemented programs that were set up long before the pandemic to help people avoid foreclosure. If you don’t pay a secured debt, the lender may take steps to confiscate the pledged property through foreclosure or redemption.
How do I get out of debt without money?
To keep up with your debt payments (or get ahead), you may need to cut your spending in other areas. Some people pay off old credit card debts, really old ones, even if they are no longer required to do so by law. A smart step on the way to reducing debt is meeting with a credit advisor. However, this option is much more helpful if you do it before you’re desperate. If interest rates on your debt make it difficult to keep up, you may be able to adjust them downwards.
References:
- Debt Relief Options – What to Do When You Can’t Pay Your Debts | LegalZoom
- How to Deal with Debt Collectors When You Can't Pay | MMI
Barry Ritholtz is a renowned finance expert, author and blogger. With over 30 years of experience in the financial industry he has gained a reputation as a thought leader and influencer in the investment community.