The majority of people who are trying to sort out their bad credit see their bank as their enemies and burying their heads in the sand, avoid speaking to collections departments therefore miss the chance to get help with their financial problems.
You need to remember that if you have got any kind of unsecured credit with any financial company, they can basically not get their money back from you unless you hold another account with them that is in credit, they are entitled to take payments from there. But other than this, their opportunities are limited, and they are trying their best to avoid legal costs.
In case they are desperate for the money back, they have to go through costly and complicated procedures in order to get their money back, therefore they are likely to come to an agreement with you if you are ready to compromise.
Some banks have also set up a dedicated debt management team that will be able to help you with a financial review, refinancing or other agreements. As long as they do see that you are open for negotiations, they will be keen to try and find a solution.
Alternatively, if you are not happy to approach your bank with your consolidation plan or you do not have any, you can always go ahead and find a free third party service that is going to be happy to deal with all the negotiations on your behalf.
Dealing with bad credit is stressful enough, and as we all know, stress can cause loads of long term illnesses, therefore the sooner you set up a debt consolidation plan, the better control you will have over the situation.
Things to remember and avoid:
Bad credit is definitely not something that will get sorted on its own. And unfortunately the longer you leave the snowball rolling the worse the situation becomes.
Be aware of harsh and “on the spot” decisions and if you are not one hundred percent sure that you are making the right decision, always seek professional advice before you make a move that you might later regret. Goring straight for an IVA or bankruptcy without considering the options first is actually considered financial suicide. It is not only causing you more hassle than necessary, but it can actually ruin your credit rating for long years if not decades.
So please think again before you do choose one of these options. To determine which consolidation plans or products would be the most suitable for you is going to depend on your current credit score firstly, and also the APR of the new product.
Be mindful to consolidate the highest interest credit first, and create a strict budget to be able to stick with your consolidation plan.
If you need help setting up this plan, you can check out if your bank offers any complimentary service or find a debt counseling agency to do that for you.