Obtaining a copy of your credit report is the first step for you to accomplish. Access your free credit report from each of the three credit bureaus one time each year at http://www.annualcreditreport.com. Your credit report gives you contact information for each creditor and allows you to see how much you owe and to whom. You will also be able to check your credit report for mistakes and complain if you find any inaccuracies.
Once accomplished, you need to develop a monthly budget. You will be able to see how much money you can set aside for your collection accounts in a month. One of the best ways to save money is to have a budget developed carefully, as it will help you to keep track of your spending and will result in your money going further. Be strict with your budget; once it is in place, you will need to keep to it.
Following these steps, your next is to speak directly with the creditors. Do not concentrate on the debt as a whole, as paying it off will seem hopeless. Focus only on one creditor at a time. Try and negotiate a lower settlement amount. Most will permit you to settle, but they will want a payment within a certain amount of time. Don't be pressured into paying more than you can afford. You should not agree to a payment if it will cause too much of a struggle.
You can pay the entire balance owed or call and see if you can ask for a settlement amount if you have a large amount of money to pay off the old debts. Even though the damage has already been done to your credit report, creditors prefer to see that it is paid down to zero as opposed to any lingering amount. Also preferred is that you pay the entire amount owed instead of a lower settlement, but you should pay it off as soon as possible either way, as that is of the utmost importance.
Collection agencies are able to take people to court for wage garnishment and will do so. If your creditors will agree to a payment schedule, you may be able to avoid legal procedures all together. It is not easy to work out a payment arrangement since they often refuse. However go ahead and ask because there is always a chance that the collection agency will be willing to work out payment arrangements. Simply planning a course of action will keep you on track.
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