One of the best tools for repairing credit is to stop, think, listen, and get educated to the laws that govern credit. If you are in debt, you need to stop and think about your situation and stay alert to the activities on your credit report, at all times.  Even one negative entry can have a real adverse impact on your credit score.

In this article, we are going to examine advantages and disadvantages being the debtor. Let's take a look at what can happen when you have bad credit as well as what you can do to protect your self from the creditors and collection agencies who will pursue you relentlessly until your obligations have been paid in full .

If you are obligated to pay child support, college tuitions, income tax, the IRS can take garnish your wages and even attach your property to assure the government gets its money from you. This means each year that you miss payments and are at default the IRS will deduct your entire tax refund to repay the debt. The IRS is obligated to contact you before deducting any fees from your tax refunds, so use this contact as a chance to open negotiations with them.

If you miss payments on Insurance Policies and you have conditions stipulated on your morgage you may be at risk of loosing your property. If you have late bills on utilities, under law, (in most states) the utility providers cannot cut your heat during particular months stated in the law regardless of nonpayment's. Most states are required to give you a written notice before they can disconnect your service. This will give you time to find the funds to pay toward your utilities. Likewise, some insurance policies will allow you a grace period toward your insurance.

Anytime you are allowed time it is time to stop, think and listen. If you take the time to review your bills and funds and come to the conclusion you do not have enough to pay the entire amount of the bill, you might get away with minimal balance payments temporarily.  It is always in your best interested to talk with and come to some type of terms you can live with, with your creditors than to run and hide from them.

Paying something toward your bill is better than avoiding your obligations. Another important point you want to keep in mind is that when creditors write off a debt you may be required to pay taxes on the bill. Once a creditor writes off a debt it is sent to the IRS for review and if they choose to do so, you will still pay on that bill at the end of the year. So the best bet is when you get the first letter in the mail asking you to pay your bill is to write the lender or creditor and explain your situation politely and ask for an extension on your payment terms.

The truth is most creditors that extend you credit hope that you will be a returning customer and are only suffering temporarily. If you can keep the creditors on your side this is your best solution for avoiding complications. Another suggestion is to send in minimal payments on current bills that are overdue. Your next bill will be steep but if you keep sending minimal payments until you are caught up, your name will not go in a credit bureau.
    
If you have a bill and have money to make payment tell the creditor that you will send the money through regular mail immediately. Do not waste money on services that will charge you to send a bill. If you contact the creditors and they simply deny you the opportunity to extend your debt or ask for proof of your situation, it is time to make contact with a Debt Counselor. The Debt Counselor will work on your behalf to resolve the issue.

Do not argue or use foul language when you are addressing your debts, since this will only add more problems. If you have a bill, and more than enough time allowed for pay it is important that you DO NOT contact the creditors or collection agencies. This is only letting the agencies know that you realize you owe the debt. By acknowledging, the debt will open up a new debt. Collection agencies and creditors pose a threat to millions of people each day, so the key to solving the problem is finding a solution to the problem. Stop, think and listen before you act.

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