Tip #1: Pay Off High-Interest Credit Cards Faster. When paying off credit cards, always pay off the card with the highest interest rate first, while only paying the minimum payment on card(s) with a lower rate. Once the high card is paid off, apply every dime of what you were paying on that card to the remaining card and be debt free faster than you imagined.
Tip #2: Be Proactive If You Can't Pay. If you know you're going to be late in making a payment on any debt you owe, call the creditor institution or company and let them know.
In some cases, they can arrange for you to at least make a small partial payment on what you owe without serious consequences in terms of interest or damage to your credit rating.
Tip #3: Manage Medical Debt Wisely. If you end up with a large medical bill, be sure to double-check your coverage with your insurance company to ensure you're not paying more than you should.
Also double-check your hospital charges; the federal General Accounting Office estimates that the average hospital bill has about $1,400 in mistakes.² Take a close look at your bill and ask the hospital to explain its charges if something doesn't look right. If you can't pay the entire bill at once, most hospitals will work with you to set up a payment plan without huge interest rates and/or late fees.
Tip #4: Consider a Reverse Mortgage. If you own your home outright, you may want to consider a "reverse mortgage" as an option for paying off a large debt. A reverse mortgage is a special loan that:
Allows you to get money from your home now.
Doesn't require a certain income or credit rating.
Doesn't need to be paid back until you move or pass away.
To qualify, you need to be at least 62 years old and have no outstanding loans or liens against your home. Please consult with your tax or legal advisor to further discuss this option.
Tip #5: Know Your Rights. No matter how deep in debt you are, you have certain rights all creditors must legally respect. For example, creditors cannot call you at work if your employer bans such calls. And they can't imply you've committed a crime or say you'll be arrested if you don't pay your debt.
For more information, call the National Consumer Law Center publications department at 617.542.9595 and request a free copy of "What You Should Know About Debt Collection."
State laws on debt collection also vary. Contact your state's Attorney General's office for more information if you have questions about the laws in your state.
Tip #2: Be Proactive If You Can't Pay. If you know you're going to be late in making a payment on any debt you owe, call the creditor institution or company and let them know.
In some cases, they can arrange for you to at least make a small partial payment on what you owe without serious consequences in terms of interest or damage to your credit rating.
Tip #3: Manage Medical Debt Wisely. If you end up with a large medical bill, be sure to double-check your coverage with your insurance company to ensure you're not paying more than you should.
Also double-check your hospital charges; the federal General Accounting Office estimates that the average hospital bill has about $1,400 in mistakes.² Take a close look at your bill and ask the hospital to explain its charges if something doesn't look right. If you can't pay the entire bill at once, most hospitals will work with you to set up a payment plan without huge interest rates and/or late fees.
Tip #4: Consider a Reverse Mortgage. If you own your home outright, you may want to consider a "reverse mortgage" as an option for paying off a large debt. A reverse mortgage is a special loan that:
Allows you to get money from your home now.
Doesn't require a certain income or credit rating.
Doesn't need to be paid back until you move or pass away.
To qualify, you need to be at least 62 years old and have no outstanding loans or liens against your home. Please consult with your tax or legal advisor to further discuss this option.
Tip #5: Know Your Rights. No matter how deep in debt you are, you have certain rights all creditors must legally respect. For example, creditors cannot call you at work if your employer bans such calls. And they can't imply you've committed a crime or say you'll be arrested if you don't pay your debt.
For more information, call the National Consumer Law Center publications department at 617.542.9595 and request a free copy of "What You Should Know About Debt Collection."
State laws on debt collection also vary. Contact your state's Attorney General's office for more information if you have questions about the laws in your state.
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