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Debt Collection - Part 2

Once you've navigated the tricky sea of debt collectors, it's into calmer waters. Calmer - but by no means shallow. Anyone who has experienced serious debt understands the feeling that you're in a tiny little boat floating at the top of a very deep, dark, sea. But keep paddling! There is nothing worse, or less productive, than giving up. At the same time, you do not want to propel yourself back out into the realm of debt collection. The first thing you want to do is get a sail hoisted, and possibly invest in some bigger paddles.

Debt

Forget the days of gold and bullion. We are in the age of plastic, baby. Remember the excitement of your first debit card? The thrill of your first credit card, when your bank trusted you with money you hadn't even earned yet? Everyone promises themselves they will only ever spend responsibly, and for the most part, everyone means it. But when you have rent to pay, electricity to pay and the costs of running your car all mixed up with trying to keep food on the table, keep the kids in school and keep the family in good health, sometimes the only practical solution is maxing out the credit cards. Sometimes we are faced with the choice between floating in a dangerous direction and sinking. It is scary. But there are solutions.

Bad Credit Rating

If you get a reputation as a bad sailor, you might face problems when you're looking for a ship that will carry you. More practically, this means you might find it difficult to get a loan or credit card, you might be refused a mobile phone plan and you might be ineligible for special interest deals. In the world of plastic money, a good credit rating is something people often don't realise they have, because it doesn't impact on our life and the things we want to do until it is bad and we are deemed risky customers. Businesses can access your credit rating only with your permission, but if you refuse it they have the right to deem you a risk regardless of your actual rating. Your credit rating is based on information such as your working history, your current employment, any debts you have, whether or not you've ever declared bankruptcy, even your address. A bad credit rating can seriously impair your financial freedom and is a problem many people shy from addressing. But don't be afraid! Understanding is the first step to a solution.

Debt Help Professionals

Once you realise you're following a heading to bad credit rating, you can call for assistance. There are many debt help professionals out there - just do a quick search on Google or check your local phonebook. They are experts at identifying the hole in your vessel and suggesting the best ways to fix it. Usually they advise people to revise how they're spending and consolidate their debts into one easy-to-manage place. After all, is it better to have five little holes spread out around your boat that you're constantly running around trying to plug, or one hole you can give your whole attention to? Of course, the hole might be a little bigger but that con is far outweighed by the benefits. If you to manage your debt and keep in contact with your lender about your financial situation, it is much less likely that you will face debt collection.

Keeping Away From Debt Collection

Now that you've made it out of the territory of the debt collectors, it's time to think of a few ways to stay out of it! Consolidating your debt is a good first step, but it's also time to seriously consider how you got into waters this deep in the first place. There are also professional financial counsellors who can help you learn how to sail according to your income. This might mean downgrading your ship, settling for wooden doorhandles rather than brass, you get the idea. Keep your receipts and look over them at regular intervals, such as every fortnight or once a month. Where is the majority of your money going? Do you spend the majority of your money on rent? Maybe you need a housemate to help you with expenses. Do you spend too much on food and entertainment? Set a limit on how many nights you eat out. Are you prone to impulse buys? Try giving yourself a budget before you go out and take cash - it's much harder to bow to the temptation of new set of sails when you have no way of paying for them! If your credit rating is too bad to be granted a loan to improve it, read Debt Collection 3 for more solutions and the final steps for getting back to dry land and avoiding debt collection territory for good.