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Friday, February 6, 2009

Dealing With Credit Card Debt

I found this article last year when i was upset and finding solutions to my problem on credit card debt.

This might be helpful to you, though the author is not from the Philippines.
Here is the article :


Dealing with Credit Card Debt
by : Dr. Drew Henry

Are you worrying of paying your credit card debt?
Are you truly in trouble with your financial?
Dealing with credit card debt is not as hard as you may think.
If there's any consolation, you're not the only one facing such situation.
At some point, many people like you face financial crises with credit card debt.
But you must remember that your financial situation doesn't mean it
should go straight to the dogs, making it worse than as it is.

Here are 5 tips to help you cope with your credit card debt:

1. How to address Debt Collectors.

There is a law that givescertain conditions for debt collectors as to when and how they should ask you to pay. The federal law, Fair Debt Collection Practices Act, clearly states that those collecting debts may not bug you, give false assertions, or do practices that are not fair when they are getting to collect money from you.

2. Make a Budget.

If you want to have a grab of your financial situation before you lose everything, making a budget is what you should do first. Assess how much do you get from your income or other means and your expenditures. For example, if getting that
posh apartment means you have to limit your meals to once a day, then it is not a great and sound budgeting decision. Your goal is ensure that you can answer for all the basic necessities: food, housing, clothes, health-related costs, among others.

3. Bankruptcy.

Generally, personal bankruptcy is known as the last choice to fix your ballooning credit debt. A bankruptcy unfortunately stays on your financial information report for years. Getting additional credit, buying a house, sometimes even getting a job might be hard for you. Technically, however, it is a legal way of addressing your credit debt.

4. Contacting Your Creditors.

Remember: Running away from your creditors is not the answer.
It is not a solution, and may in fact lead you to bigger problems.
If you are having trouble paying off your debts, address this immediately with your
creditors.
State to them sincerely and fully the reason why it as become hard for you to pay these debts, and check if they could give you a revised payment arrangement that will put you at ease on your payment terms.
Do not let creditors turn over your situation to someone or an agency to do the collecting for them, as this means that they have given up on you.

5. Credit Counseling.

You could also consider getting the aid of groups or institutions that will help you in your problems. If you managed to have an improved payment arrangement of your debt with a good credit counseling organization, creditors may approve of your proposition and accept your modified arrangement plan.

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the question is - will this be applicable in our situation?

Unfortunately here in the Philipiines , debtors are not protected against harassments from collection agents. We do not have Fair Debt Collection Practices Act protecting the debtors from harassments. Few years back, Sen. Merriam Defensor Santiago authored a pending bill with the senate entitled "An Act Providing for Fair Debt Collection Practices and Requiring Debt Collectors to Observe Such Practices". I just hope this bill be approved.

We do not have bankruptcy law.

The banks are not willing to negotiate , the debtors are referred to collection agencies for harassments.

I am just hoping that something could be done to help us reach our journey.

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