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The right response to mounting credit card debt

At one point or another, virtually every Washington resident will encounter some level of financial strain. When that happens, bills tend to go unpaid, and credit card debt mounts. Knowing how to respond to mounting credit card debt during a financial shortfall can have a big impact on how things will ultimately be resolved.

If bills are just 30 or so days late, the best thing to do is to take a proactive approach. Reach out to creditors and let them know what's going on. Tell them that you have run into a temporary budget squeeze, but that you will be making your payment in a short period of time. At this stage, the creditor will be more concerned with keeping you as a customer than in pursuing aggressive collections.

If bills go 30 to 60 days late, then it may be time to contact the creditor and ask about repayment plans. It may be possible to restructure the debt to allow for smaller payments over a period of time until things become more stable. At this point, avoiding collections calls ro letters is the worst thing to do, and will only make matters worse.

If credit card debt becomes more than 90 days late, creditors are going to be understandably concerned. Collections efforts will become more serious, and fines and fees will begin to accumulate rapidly. At this stage, Washington consumers must make some decisions about whether the debt can be repaid in a timely manner. In some cases, pursuing long-term debt relief options may be the best way to proceed, up to and including filing for personal bankruptcy.

Source: CNBC, "Here's what happens if you don't pay off your credit card debt", Abigail Hess, Sept. 19, 2017

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