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More consumers purposely miss paymentsby Cara Restelli, KY3 News
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In an effort to keep from falling behind on payments, more people are choosing not to pay their bills on time. It may sound confusing but it's a catch-22 that causes consumer delinquencies to skyrocket. The second quarter of 2009 saw another record rate of consumer delinquencies. A big reason is people choose not to pay their bills in hopes of getting their lenders to reduce their total balances.
“You almost need to show late charge on your statement to get someone to be willing to negotiate a decrease of payment and interest rate,” said Landy Dixon with Consumer Credit Counseling Service of Springfield.
Lenders are offering mortgage modifications to homeowners already in trouble and credit card companies have reduced balances by as much as 50 percent for customers who haven't paid, all while those consumers who have always been on time but foresee needing help in the future probably can't get it.
“We don't want people to get behind but it's inevitable before someone is willing to negotiate with you,” said Dixon.
It's likely contributing to delinquency rates hitting record quarterly highs in three key areas: home equity loans, home equity lines of credit and bank cards. Landy says, however, you don't have to miss payments to get help. Counselors with Consumer Credit Counseling Service can help you deal with lenders or help you work on your budget.
“When you do get in a crunch, it's good to get someone else involved to offer solutions you didn't think about. Maybe it's things in your budget, maybe it's rearranging how you pay back debt.”
Here's some advice for everyone. If you've experienced no changes in your financial situation, don't assume things will continue to remain the same. Start a savings account and strive to save an amount equal to 6 months of your income.
If you've experienced a loss in income but are not yet late on bills, continue to pay them and cut back on non-essential expenses.
If you're already late on bills, call your creditors immediately and find out what you can do to reduce your payments or call the Consumer Credit Counseling Service of Springfield at (417) 889-7474 for some free advice.
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