At some point, most people let their money get a little out of hand. It's just a fact of life that we spend more than we have these days, what with all the credit that lenders give us and all the temptations to consume and buy more. In fact, because lenders are giving more and more credit to people no matter what their situation is, credit problems are becoming one of the most common sources of stress in the United States. Part of the problem is that people spend too much, part is that people lend money without thinking, and the rest is just bad luck or bad timing. But whether we like it or not, almost all of us will let our credit slip at some point.
Repayments
So, what do you do if it becomes harder and harder to make payments? You can do a number of things. As always, the first option is to do nothing. Just don't pay attention to the problem and hope it goes away. The biggest problem with this choice is that the problem doesn't really go away. If you don't want to deal with notices, threats, debt collectors, and worse for months or even years, you can't just ignore the problem.
"Consolidation of Debts"
Debt consolidation is another choice. This is when you get a loan with a low interest rate and use it to pay off all your other debts. Then you will only have to pay the debt consolidation loan, which should be a single payment that is easy to make and manage. The risk of consolidating debt is that you usually have to own your own home and be willing to use it as collateral for the loan. This puts your home at risk of being taken away if you don't pay your bills. The other problem with debt consolidation is that it often makes people feel like they can afford to get into even more debt.
Can't Pay
One of the best things you can do is call your creditors and let them know that you're having trouble making your payments. Many of them will be much more willing than you might think to work with a cooperative debtor who is in trouble. Most of the time, the alternatives to working with you, like sending the loan to a debt collection agency, are not very appealing. If they see that you are trying hard to pay off the loan, they will be willing to give you a break. If you have too much debt, call your creditors to see what can be done.
