Being in debt can be stressful and overwhelming; but no matter how much you are tempted to ignore the problem, you must be proactive. Below are three things you must to if you have defaulted on your debt:
Read the notices you receive from your creditors. Even if you know you can’t make a payment, you must read the mail sent to you by creditors. Failure to read notices sent to you by creditors can cause you to miss out on learning about what new collections activity is taking place. Notices about lawsuits, liens and levies will be sent by mail and your failure to read those notices could cause you to lose assets when creditors finally decide to take aggressive collections actions. Remember, if you receive a notice about a lawsuit, lien or levy, only bankruptcy has the legal power to stop those actions. It may be in your best interest to contact a bankruptcy attorney if you receive a notice regarding any of the above collections actions.
Communicate with your creditors. You must let your creditors know in writing about your situation and financial condition. Even if creditors don’t seem to be sympathetic, still let them know in writing the hardships you are facing and thoroughly explain why you are unable to pay your debts. If you eventually decide to file bankruptcy, you will be able to confidently say to yourself and your loved ones that you documented your hardships with creditors and they still refused to budge.
Ask for help. Even if you are feeling hopeless about your financial situation, you must take the time to ask for help from your creditors and take the time to consider other options such as bankruptcy. Write a letter to your creditors asking for a temporary reduction in payments or even a deferment while you get on your feet. Talk to a bankruptcy attorney about how you can use bankruptcy to protect your assets.