Drowning in debt? Contact your local credit union
by. Amaia Kirtland
More than a third of the U.S. is having trouble paying debt on time. Thirty-five percent of Americans have debt in collections–a bill overdue by 180 days–according to a new study from the Urban Institute, Washington, D.C. Payments this late have been reported to a credit bureau and can affect your credit score ( USAToday.com July 29).
On average, each of the 77 million Americans with debt in collections owes $5,200, which includes debt from credit cards, medical bills, utility bills, child support, membership fees, and even parking tickets. If you’re in this situation here are steps you can take:
- Contact your credit union– If your debt includes credit union accounts, contact a credit union representative to discuss the possibility of modifying your loan or credit card terms to make payments more affordable. Credit unions have options that will keep you from resorting to nontraditional lenders, such as payday lenders, who prey upon borrowers who believe they have no other options. Credit union credit cards, mortgages, home equity lines of credit, and other products generally have lower interest rates and better repayment terms than you can find elsewhere. For non-credit union debt, contact those creditors as well and explain your situation. They also may be willing to work with you.
- Reduce expenses –There usually is wiggle room in spending categories such as dining out or getting take-out, transportation, and entertainment. Don’t stop there, though; scrutinize every expense.