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The proper reaction to different degrees of credit card debt

Tennessee residents encounter escalating debt for a number of different reasons, many of which lie beyond their control. When credit card debt mounts, the manner in which a consumer responds will shape the outcome. Knowing how to respond to ongoing credit card debt struggles is important, and can prevent a negative financial outcome.

When an individual is in the early stages of debt, it may simply be a matter of a pattern of late payments. The best reaction in this scenario is to take a proactive approach. Reach out to credit card companies and let them know that there will be a delay in payment for that month. Very often, the creditor can assist by waiving fees and fines, which can make it easier to manage the rest of that month's budget.

If payments are 30 to 60 days late, expect creditors to come calling. It is absolutely vital to answer those calls, and to work with lenders to rectify the situation. Avoiding collection calls will only escalate the problem. It is a good idea, however, to limit communications to writing at this stage, in order to have a record of any agreements or payment arrangements that are made.

Once a Tennessee consumer has fallen 90 of more days behind on credit card debt, the situation may require more intensive debt relief efforts. If the late payments are the result of a temporary decline in cash flow, then it may be possible to create a repayment plan. However, if credit card debt has gotten out of control due to a more pressing problem, such as a medical issue or a job loss, then it may make sense to pursue more aggressive debt relief efforts, up to and including 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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