Within two years of working as an executive assistant, I was already drowning in credit card debt and have not been able to pay off my mortgage and insurance premiums. I even coined a nickname for myself, debt delinquent.



Most people initially react by avoiding their creditors. If they can't reach you or find you, you're safe, right? WRONG! This tendency to avoid the lender is a bad one as one loses out on possible ways of fixing one's credit situation.

If only I had taken the time to talk to any one of my creditors, I would have been given a chance to pay them off instead of filing for bankruptcy. Eventually, however, I did learn my lesson.

Remember that your lender is looking forward to repayment. Your bank will want some of the money that you spent on your holiday sprees. Your lender could easily give you some leeway so as to make it easier for you to pay off the loan. They are not as evil as you think they are. In fact, lending institutions can save you from falling into poverty -- or bankruptcy at least.

Your credit card issuer will mostly likely give you amnesty, if you promise to pay them back with a span of time. In fact, you might even be able to convince your lender to do away with some of the fees. By talking to them, you will have a lot more options on how to settle your balance than by hiding out in the mountains until you think they have surely forgotten about you.

But during this time, your credit card accounts might be closed as they do not want you accumulating more debt while trying to pay off your balance.

If you have unpaid loans from various institutions, they will almost certainly advice you to join a debt management program or refer you to a debt counselor. If you are currently struggling with a major burden of debt and have multiple loans to pay, go in for debt consolidation.

With consolidation, all of your debt will fall under one loan. As a result, there will only be one loan installment that you will have to take care of. Do not worry so much about your credit score at this time, focus on paying off your debts. Once you finish paying off your outstanding debts, you can once again begin to concentrate on fixing your credit score. Just one point to remember is that student loan consolidation works differently and it does not affect your score.

Reaching out to creditors gives them the impression that you want to pay them back and you're willing to do it on terms that are beneficial to both parties. This is a good way to impress upon potential creditors that you made the effort to repay your debts despite your financial troubles.