You should already have an Idea of who you owe money to and how much. If not, you can start to get the picture by gathering together any bills or account statements. Call a Credit Reporting Agency and ask them to send you a copy of your credit file. On this file you will find listed some creditors who may be chasing you along with the amount they are after. You could also ring companies who you think might be creditors and ask them to check to see if you have an account with them.
When you start to ask about your accounts creditors will ask you to update your contact address and phone numbers with them. If you have been lost to them, you will be put back on the debt collection system and your phone and mail box may come to overflow with their demands.
As you compile your list of debts, divide your creditors into ‘Secured’ and ‘Unsecured’ creditors. A secured creditor is one who has the right to repossess an item of your property in lieu of payment. For example, the mortgagee for your home loan, or a finance company holding a bill of sale over your car, computer, electronic goods etc. Unsecured debts are those where the creditor has no right to repossess property. These debts include credit cards, store cards, store finance, personal loans, utility bills, and tax debts.
If you are not sure whether a debt is secured or unsecured, read through your copy of the relevant credit contract. Look for a reference to ‘Security’. If you don’t have a copy of the paperwork, call the creditor and ask them to tell you if they hold security and if so, what is it and what asset is covered by it.
You need to know if any of your debts are joint debts. Joint debts are debts with two or more signatories to the credit contract. A joint loan or joint finance agreement enable the combined income of a couple to be taken into account when applying for a loan or finance. Each signatory is required to pay the full amount of the debt until the debt is fully paid. If you have a joint debt, you must factor in the full value of the unpaid debt and not just what you consider is your share.
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