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Diminish your old debt in the New Year

Thursday, January 10, 2013 - 12:01 am

This is a consumer advice column written by the Better Business Bureau of Northern Indiana. It appears Thursdays in Business.

Old debt follows some consumers into the New Year. There is no quick fix for financial resolutions and companies that make unrealistic guarantees probably can’t deliver. Your BBB serving northern Indiana outlines options on the road to debt recovery.

•BBB’s Managing Credit—Made Simpler: If obligations seem overwhelming, use bbb.org/credit-management for free insights. This will help set you on to the road to recovery.

•Lenders or Debt Collectors: Before enlisting outside help, consult with lenders or debt collectors directly. Discuss loan modification options to help reduce interest rates and make payments more manageable. On unpaid debts, retain details in writing; attempt to work out payment plans, meet obligations on time and stay in contact throughout the process.

•Counseling: Try nonprofit credit counseling services. Consultations are free or involve minimal fees.

•Debt Consolidation: Weigh options carefully. Companies combine outstanding debts or multiple loans into one loan—in an effort to reduce interest rates and lender accounts—making payments more convenient and manageable. If companies charge excessive fees or interest rates, consumers will end up paying more money over longer periods of time.

•Debt Settlement: Proceed with caution, contracts and com