When money gets down to the wire, any one small thing can send personal finances over the edge. Missing payments or paying late inadvertently lead to calls, letters and demands. It's not long before you're wondering how to keep creditors at bay!

You don't need to live in stress or loose sleep over collectors. You do need to act responsibly and make arrangements with creditors to adjust the terms of your debt to ones you can manage. In most cases you can do this without any outside intervention. A simple phone call or letter explaining your situation and stating concise and reasonable terms, is usually all it takes to get you back on track. By taking steps yourself you can avoid collection agency action as well as adverse credit reporting and scoring by credit agencies.http://www.moneymatters101.com/credit/deal.asp

Before you proceed with anything, obtain a copy of your credit report and examine it for accuracy. The Federal Trade Commission (FTC) now provides annual credit reports from 3 separate agencies, for free to everyone who requests them. These reports will allow you to scrutinize the records of 3 separate reporting sources and dispute or correct any erroneous or inaccurate information.http://www.ftc.gov/freereports

Outstanding debt is never a reason to endure harassment, oppression or abuse. It is illegal for debt collectors to threaten you with injury or prison, hurt you, damage your property, swear or use obscenities while speaking with you, or call you repeatedly and excessively.http://www.creditguard.org/creditor_harassment.html

Don't be afraid to take a stand. You can and should set limits and restrictions on the execution of the collection. Requesting that creditors do not call you at work is your right. You can also set a time-frame within which calls need to be placed (for example between noon and 3PM).http://ezinearticles.com/?How-to-Deal-With-Creditors---Understanding-Your-Rights&id=3991900 The FTC oversees the enforcement and protection of these rights and is responsible for investigating inappropriate collection tactics.http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt086.shtm

Creditors don't have the right to harass you. But they do have the right to call you as often as they like until you answer your phone or call them back. Act in good faith and demonstrate effort when it comes to rectifying the situation. If you are able to reach any type of resolution, it will stop the calls and allow you to get back to your life.

There are many things you can do to fend off creditors and collection. If your credit card offers balance transfers at low or no interest, then you may want to utilizing this benefit for paying off high interest debt. There will be an administrative fee associated with the transfer, so keep this in mind when calculating your ultimate expense. Only consider this option when you are certain that you an afford to pay the credit card premiums and stick to the rules. If not then you could wind up with more debt than you bargained for.http://www.fool.com/personal-finance/credit/how-to-win-the-balance-transfer-game.aspx

401K loans are another product suitable for comparison. You can borrow up to 50% of your vested amount and take up to 5 years to pay back your loan with interest. The thing that makes these loans so special is that they typically carry a low interest rate (ARP + 1%) and best of all, you are paying yourself back the principal and interest.http://www.forbes.com/2008/09/02/401k-loan-borrowing-pf-education-in_rw_0902investopedia_inl.html This is a no brainer provided the market isn't making any significant leaps which could translate to hefty dividends. You're ultimately removing your money from the market when you 'borrow' it. Also worth mentioning is the ultimate goal of the 401K - saving for retirement. So unless you're serious about only using the loan in the event of an emergency and putting it all back, don't put your retirement at risk and take a different route.

Debt consolidation has become popular in the past few years as another vehicle for repairing personal finances. Be aware of consolidation loan terms. Your monthly payment may be less but your loan is for a longer duration ultimately resulting in more interest.http://www.daveramsey.com/article/the-truth-about-debt-consolidation/

Bankruptcy should be considered a last resort. If this is the route you choose you'll need to be transparent. Bankruptcy is intrusive. It also does not wipe away certain obligations like child support, tax debt, and student loans.http://www.nolo.com/legal-encyclopedia/checklist-29449.html

Creditors and collection agencies go to great lengths in the hopes that you will weaken and pay debt down with money you don't have. Don't let anyone get you to immediately pay debt that you can't afford. Only you know your money situation intimately. Although what they are saying is striking a cord with you, don't back down. Stick to your guns. Often times if one tactic does not work, collectors will move on to the next. Keep your delivery calm and your message consistent.

You'll have to be inquisitive to find out all the options available to you as far as repayment, reductions and forgiveness. For example, provided your debt is old and no payments have been made in a considerable amount of time, your debt can be negotiated down. You can get creditors to forgive interest and fees.Typically you will be asked to pay a lump sum in order to be eligible for the reduction. You don't have to agree to this. The ball is in your court. This path is not easy but it can lead to success.http://www.jobbankusa.com/CareerArticles/FinancialAspects/ca111406c.html

The content in this page is not a substitute for professional financial advice. Please contact a finance professional before using the information presented here.