Question

I am new to all of this. I have been slowly buying the things I need to get started. I am not sure though how to deal with a few debts that have gone to collections. One is my student loan for $23, 000 the next are other random things that total to about $2300. As of right now we do not pay on any of this hence why they are in collections. How do I deal with these items? Do I save up and pay off all at once? Or do I try and save as much as I can and call the debt collectors and try and make bills. Please help me out. Thank you from someone who was never taught how to manage money.  

Answer 1

I wish I could help. I have no experience. Best of luck; someone in this group will have awesome ideas.  

Answer 2

Hi there! Start with a budget. Go through your essentials (4 walls). These are your living expenses, including important bills, and the most important in your budget hierarchy. Even if these bills are important, find out how else you can lower them. Depending on how bad your situation is, you may have to cancel some expenses like subscriptions or look for alternatives where you can save. This is hard but it's also temporary if total debt elimination is your goal. Next step would be to look at your debt. Concentrate on current debts for the meantime so you can pay off the minimums. If you can snowball your debt from lowest to highest amount, then you'll be able to pay it off faster. The collections will have to wait a while until you have a better grip on paying off current debts, if that's possible.  

Answer 3

So you need to call them and see if you can set up some kind of payment plan asap. Well, actually first you need to figure out a realistic budget so you will know what you can afford. Do this by going thru a cpl months worth or cr card or bank statements to see where all your money is going and know where you can cut out Or fix things. Then call and make a plan. Like can you pay $50mo? What will they accept. Also on the student loan my understanding is they will take your tax refunds every year until paid and can eventually garnish your wages. Get that taken care of sis. It will literally NEVER go away. *edit to add, do NOT wait. Do not “save up” start taking care of this as soon as you know what you can realistically afford to pay. Start low, “i can pay $20mo, (example) even if you can pay $40. See what they will take, then make it your highest priority to pay that crap on time.  

Answer 4

I would recommend sitting down and tracking all of your spending and bills so you know exactly how much you can afford monthly to put toward these debts. Then I would call and set up payment plans and start making payments and paying extra as often as possible to get rid of them as soon as you can. Just take it a day at a time. But be sure to know all of your financial situation before agreeing to a payment plan because if you can’t afford the monthly amount you’ll never be able to get on top of it.  

Answer 5

You cannot run or hid from these collectors. Things will only get worse. You need to contact them if only to give them a time when you can speak with them, maybe a week. Then work furiously to figure out your four walls (food, shelter (including utilities mortgage or rent), clothing then transportation). Then talk to them and let them know what you CAN pay them. There is a process to handling collectors and you have to stay calm. Even it's hard, keep your emotions out of it. Good luck!