Follow The Laws And Stay Within It To Repay Your Debts
The law allows you to take on a loan for any purpose whether it is for any personal reason or to buy a consumer durable, to fund your child’s education or marriage, arrange capital for your business and even pay off your medical bills.
The law also puts a responsibility on you to repay the amount borrowed to the creditor along with an interest. Failing to repay will fetch legal obligations and punitive penalties and even a lawsuit filed by your creditors.
However, the law allows you to arrange for money if you find it difficult to repay the debts you have.
If you want to know about these alternative sources and the consequences of each it is better that you contact a debt advisor, counselor or an attorney. The expert professional will enable to guide you through the route to pay off your debts which may not be clear-cut and easy for all types of debts.
Specific debts will have more room for negotiating for a debt settlement while others may not be so easy and you may risk losing on something else such as your collateral in the process. Therefore, it is prudent that you take a look at all your options closely so that you do not take on one by judging by its face value only.
Taking a smart approach to pay off your debts will help you to avoid being delinquent and hurt your credit report. For this you will have to consider the following:
- The payment plan
- The unsecured and secured credit options
- Availability of any hardship plan and relief options by checking at com and
- Negotiating on the debts on your own or through a debt settlement company.
When work with a service provider you must be very clear, specific and upfront about your affordability to repay your debt. Also consider your insurance options because if you do not have any then according to the law you may be charged more than somebody who does. Remember, if there is a price disparity it can give you a lot of leverage.
What the law allows
According to the law you can follow specific strategies to repay your debt. All these debt relief options are legal and binding by the law.
Payment plan: To manage your debts properly you must have a specific payment plan. You can work out such a plan by yourself but to make it more effective and easy you can once again consult a professional. They will ensure that you repay the debt easily which you may find repaying in one payment difficult especially a medical bill. The process involves:
- Breaking the outstanding amount into multiple equal payments and
- Paying it over a few months so that the total amount is covered.
However, you must clarify whether there are any fees and billing charges that may affect your payment plan as well as your affordability.
Credit cards: You can also use your credit card according to the law to repay a specific debt such as medical debt. However, you must be very careful about using a credit card as these carry the highest rate of interest and the lowest time to repay. Therefore, do your math well to find whether or not you will be able to repay it off within that period along with the high interest because failing it will result in legal actions from the credit card issuing company.
Unsecured credit options: You can choose from a variety of unsecured credit options as well to repay your current debts.
- You can take a personal loan to consolidate multiple debts including medical debts into one single monthly payment. However, you will need to have excellent credit score to qualify for low rate of interest or else it will be an expensive option. Therefore, take a personal loan when all options are exhausted and make sure that you shop around to compare the fees, rates, and repayment terms.
- You can also transfer the balance in a 0% interest credit card but you will need to qualify for it first with an excellent credit score. You will also have to make sure that you have enough resource arranged beforehand to pay off the balance before the expiry of the promotional interest period or the high interest rate will kick in.
Hardship plan: Another opportunity the law provides to the consumers is to avail an income driven hardship plan if they face any difficulty in repaying their debts and fall within the low income category. The features of these plans are:
- These are much similar to any standard payment plan
- It breaks up the total amount owed into simpler and more manageable payments.
If you can negotiate with your creditors successfully you may even reduce the total amount outstanding. If you want to avail such a plan to repay your medical bill you will however have to apply for Medicaid as per the requirement of the law to be eligible.
Negotiate the costs: For any type of debt you want to take on, you have the legal right to negotiate on the cost to bring it down. However, the law also allows the creditors the liberty to either accept or reject your request.
- However, if you loan account is with the collections it means that they have bought it for ‘pennies on the dollar’ literally. This fact provides you with a good leverage when you negotiate.
- Nevertheless there will be a lot of haggling during negotiation and therefore if you think that you cannot handle thin on your own you should hire an advocate or counselor who are experts in negotiating and can spot any opportunities that may result in a successful negotiation.
Just make sure that you agree with only what you can afford because there will be no new negotiation on an already settled account.
Lastly, keep in mind you should not rush any decision as that may deprive you from a better option that you could have qualified for and helped your financial situation to regain its health faster.