When you took out a loan, whether it was for a car or mortgage, you thought that you were financially ready. You were excited that you were financially investing in something big. Unfortunately, you have reached a point when you no longer have the same financial capacity. You lost your job or there’s a medical emergency that you need to prioritize. Either way, your finances get messed up. At some point, you won’t be able to keep up with your bills.
You will receive notifications from your creditors. Some of them are kind enough to give you several notices and warnings before taking legal action. If you took a secured loan, you will also get a few more extensions before taking away your asset.
Since you’re unable to pay these loans and you know you don’t have any income source, you decide to hide and ignore the notices you keep receiving.
If you think that this strategy works, you’re wrong. Hiding from your creditors won’t help. Your loans will still be there. Your asset could still get taken away from you. Add to that the possible legal fees you might have to incur.
Source: rd
Be brave
Instead of hiding, you need to face your creditors and talk about the loans you can’t pay. Be honest in telling your creditors that you’re currently strapped for cash. Ask for a possible extension. If not, you can request the company to drop all the penalties so you can pay the principal amount. Give them a schedule of repayments and make sure you keep up with your promise.
Creditors would accept it
Your creditors will probably accept your offer to restructure your loans. They would rather accept it than not get any repayment at all. Besides, the alternative is to go through a legal process. It might also cost a lot for the company. They would rather settle with you and hope that you will keep your promise. As long as your request is reasonable enough, you might get what you’re asking for.
Source: Hoyes – Michalos Bankruptcy
Learn from this experience
It’s troubling to end up having to hide from your creditors. You feel like a criminal who has to hide from someone. If you don’t like this feeling, you have to be careful with your future decisions. Avoid taking out loans when you know you can’t afford to pay them. Suspend your plans to invest in something expensive until you’re ready to pursue the payments. If your family has other financial concerns, you need to prioritize them. You can revisit your plans later when you don’t face the same issues anymore.
Once you’re in a better place financially, you can even take out a car loan. You can visit website, other resources and blogs to find the type of loan which might be perfect for you. If the interest rate is good enough and the repayment scheme is fair, you can pursue the loan. You also need to understand the terms in regards to late payments, so you won’t face any problems.
