How to Work out a Repayment Plan
Formulate a budget., Contact your creditor as soon as possible., Consider contacting a debt relief service to relieve some of the burden., Enroll in a debt management plan., Consider debt settlement programs very carefully.
Step-by-Step Guide
-
Step 1: Formulate a budget.
In its simplest terms, a budget is just a record of how much income you have vs. how many expenses you have.
A good budget will track all of your sources of income (e.g., main paycheck, child support, side jobs, etc.) as well as your regular spending (e.g., bills, food, clothing, etc.) -
Step 2: Contact your creditor as soon as possible.
Using your newly-formed budget, you can pinpoint exactly why you're having difficulties in repaying your loans.
Tell your creditors why you are struggling and ask them to work out a modified payment plan so that your payments are more manageable. , Credit counseling is a strong option for debtors who cannot seem to manage their budget, who can't arrive at a repayment plan with their creditors, and who have lost track of their insurmountable debts.
While credit counseling agencies can be helpful, be aware that many of them will charge large fees for the work they do.
Many credit counseling organizations will work with you to develop a budget and give you advice on how to beat your struggles with debt.
Be prepared to spend a few 1-hour sessions discussing your situation with the organization if you go this route. , Debt management plans are not for everyone.
It is only recommended that you enroll in one if you've first undergone some credit counseling and your credit counselor advises that you go with it.
Debt repayment plans entail depositing money to the credit counseling organization.
The organization will then make decisions on how best to allocate that money in terms of repaying your debts. , Debt settlement programs claim to be able to reduce your loan balance, but they are very risky and will severely impact your credit score in a negative manner, harming your future chances of acquiring loans.
There is no guarantee that a debt settlement program is legitimate; in some cases, they will not even be able to change your total loan amount but will severely damage your credit score in the process.
If a debt settlement program is what you want, then research the programs heavily before investing any money.
Look for feedback from past clientele.
Avoid programs that charge you money before any settlement can be made.
Avoid programs that guarantee anything.
Avoid programs that advise you to break off contact with your creditors.
Avoid programs that aren't open and transparent about their practices. -
Step 3: Consider contacting a debt relief service to relieve some of the burden.
-
Step 4: Enroll in a debt management plan.
-
Step 5: Consider debt settlement programs very carefully.
Detailed Guide
In its simplest terms, a budget is just a record of how much income you have vs. how many expenses you have.
A good budget will track all of your sources of income (e.g., main paycheck, child support, side jobs, etc.) as well as your regular spending (e.g., bills, food, clothing, etc.)
Using your newly-formed budget, you can pinpoint exactly why you're having difficulties in repaying your loans.
Tell your creditors why you are struggling and ask them to work out a modified payment plan so that your payments are more manageable. , Credit counseling is a strong option for debtors who cannot seem to manage their budget, who can't arrive at a repayment plan with their creditors, and who have lost track of their insurmountable debts.
While credit counseling agencies can be helpful, be aware that many of them will charge large fees for the work they do.
Many credit counseling organizations will work with you to develop a budget and give you advice on how to beat your struggles with debt.
Be prepared to spend a few 1-hour sessions discussing your situation with the organization if you go this route. , Debt management plans are not for everyone.
It is only recommended that you enroll in one if you've first undergone some credit counseling and your credit counselor advises that you go with it.
Debt repayment plans entail depositing money to the credit counseling organization.
The organization will then make decisions on how best to allocate that money in terms of repaying your debts. , Debt settlement programs claim to be able to reduce your loan balance, but they are very risky and will severely impact your credit score in a negative manner, harming your future chances of acquiring loans.
There is no guarantee that a debt settlement program is legitimate; in some cases, they will not even be able to change your total loan amount but will severely damage your credit score in the process.
If a debt settlement program is what you want, then research the programs heavily before investing any money.
Look for feedback from past clientele.
Avoid programs that charge you money before any settlement can be made.
Avoid programs that guarantee anything.
Avoid programs that advise you to break off contact with your creditors.
Avoid programs that aren't open and transparent about their practices.
About the Author
Christina Harris
Experienced content creator specializing in hobbies guides and tutorials.
Rate This Guide
How helpful was this guide? Click to rate: