If you are having trouble paying your bills, it is important to take action sooner rather than later to improve your financial health.
Doing nothing leads to problems in the future, whether it’s a bad credit record or bankruptcy resulting in the loss of assets and even your home. If you’re in money trouble, then here are some steps to take to avoid more financial problems in the future.
If you’ve accumulated a large amount of debt and are having difficulty paying your bills each month, now is the time to take action–before the bill collectors start a’calling.
1. Review each debt. Make sure that the debt creditors claim you owe is really what you owe and that the amount is correct. If you dispute a debt, first contact the creditor directly to resolve your questions. If you still have questions about the debt, contact your state or local consumer protection office or, in cases of serious creditor abuse, your state Attorney General.
2. Contact your creditors. Let your creditors know you are having difficulty making your payments on time. Explain to them why you are having trouble, perhaps it is because you recently lost your job or have unexpected medical bills. Try to work out an acceptable payment schedule with them. Most will be willing to work with you and will appreciate your honesty.
3. Budget your expenses. Create a spending plan that allows you to minimize your debts. Itemize your necessary expenses (such as housing and healthcare) and optional expenses (such as entertainment and vacation travel). Stick to the plan you have.
4. Try to reduce your expenses. Cut out any unnecessary spending such as eating out and purchasing expensive entertainment. Consider taking public transportation or using a car sharing service rather than owning a car. Clip coupons, purchase generic products at the supermarket and avoid impulse buys. Above all, stop getting new debt. Leave your credit cards at home. Pay for all purchases in cash or use a debit card instead of a credit card.
5. Pay down and consolidate your debts. Withdrawing savings from low-interest accounts to settle high-rate loans or credit card debt usually makes sense. In addition, there are a number of ways to pay off high-interest loans, such as credit cards, by getting a refinancing or consolidation loan, such as a second mortgage.
You can regain financial health if you follow these tips. But don’t wait until bankruptcy court is your last resort. If you’re having financial troubles, don’t hesitate to call experienced CPAs like Williams and Kunkel, CPA, LLP today in Flower Mound at 972-446-1040 to help you with finance-related questions.
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Source: CPA Site Solutions