By Leanne Manning
When times get tough due to drought-related economic conditions, don't ignore your debt.
The first step in addressing it is to prioritize your financial obligations. Keeping a roof over your head should be the most important debt. Staying current with car payments may be the second most critical debt, especially if that vehicle is needed to keep a job.
Commercial Credit. Realizing that you can't pay all of your bills can be a shock and make you want to run and hide. This is exactly what you should not do. It is best to face your creditors and contact them before the bills are due. Talk with them about your situation and whether you can delay a payment or make partial payments. Talk about what you think is a reasonable plan for debt repayment. Perhaps you can make smaller payments over a longer time (refinance). Once you and your creditors agree on a plan, put it in writing for both parties. Then be sure and follow the new plan. Creditors' views of you and your promise to repay are important and affect your chance of getting credit in the future.
Vehicle Loans. If you can't make payments on a vehicle loan, your vehicle may be repossessed and sold at auction. If it sells for less than the amount owed, you will have to repay the rest of the loan. Check with the creditor to see if the loan can be rewritten for lower monthly payments before the vehicle is repossessed. This means that overall you will pay more for the loan, but it may keep it from being repossessed.
Credit Card Debt. Your credit card company can cancel your card if you have not paid at least your minimum payment each month or if you are late in making payments. If it's past the due date for the payment, call the creditor with an explanation, and pay the minimum charge per month.
If you feel you need help managing your debts; contact the National Foundation of Credit Counseling (www.nfcc.org or 1-800-388-2227) for help finding a local reputable credit counseling service. Some services are free and some involve a low minimal payment. The fee may be worth it to help get you and your finances back on track.
Cutting Family Debt Payment, (UNL NebGuide G1934), by Nancy Frecks and Kathy Prochaska-Cue and published by University of Nebraska-Lincoln Extension, 2009.