It happens to everyone at some point or another. A little bad luck can put you behind on your bills.
Before you panic, learn the basics on dealing with different types of creditors so you can keep a little slip up from snowballing into a financial crisis.
For better or for worse, lenders who make student loans are quite accustomed to their borrowers having trouble paying. While that might not be good news for student lenders, it’s great news for you if you are running short on cash. Most student lenders will go out of their way to help you if you run into trouble paying.
If you are having trouble, you can ask for forbearance or a loan deferral – these can last up to three years. You can also ask for income sensitive or graduated payment options. If you still can’t make payments, your account will not be placed in default status until you are almost nine months late, and then you can ask your lender for a rehabilitation program that will allow you to put your loan back in good standing with a certain number of on-time payments.
The federal government has stepped in to help as well, offering a program that allows debtors to pay the equivalent of 15% of their discretionary income as a loan payment (discretionary income is defined as any income above 150% of the poverty level – $10,830 for an individual in Arizona in 2009).
IRS or Arizona State Tax Debt
As Arizona’s premier tax relief law firm, this is something we at The Pew Law Center, PLLC know something about. If you owe tax money to the IRS or the state of Arizona, they aren’t likely to just forget about it. They are also very good at finding you and getting their money, whether through wage garnishment, property liens, or bank account and tax refund seizures – to name a few tactics.
If you are having problems paying your taxes, do not hide your head in the sand. Contact a qualified Arizona tax relief attorney right away. An attorney who is accustomed to dealing with the IRS can help you work out an installment plan or an “offer in compromise” to settle your debt.
Credit Card Issuers (and other “unsecured” debt)
Credit cards, medical bills, and personal loans not tied to any collateral are all considered unsecured debt. Most holders of unsecured debt will wait six months before they put your account into collections – but that doesn’t mean you should ignore them if you run into a cash crunch.
If you do go into collections, the lender can take you to court and garnish your wages to pay off your debt – unless you declare bankruptcy. Assuming your cash flow problem really is temporary, bankruptcy is probably not a great option for you. Instead, call the lender right away (this should be sounding familiar by now) and ask them to help you work out a temporary payment plan. Some credit card issuers actually offer skipping a payment or two as a perk to valued customers.
Need help dealing with creditors? You may need professional assistance. Our Arizona bankruptcy lawyers have assisted thousands of people throughout AZ. If you’re in need, we’re here to help. Contact us today to obtain a free consultation from experienced professionals.