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Delinquent Debt Timeline: Debt Incurred

Feb. 23, 2017
Paying Off Debt, Personal Finance
Delinquent Debt Step 1: Debt Incurred
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Maybe you got hit with medical bills or simply went on a shopping spree. The bottom line is that you entered into a contract to pay for goods or services received.

The billing cycle begins now, and your first payment likely is due in 30 days.

What you can do: When you get the bill, make sure the amount is accurate. If it’s not, dispute it with the creditor’s billing department.

If the amount is correct, comb through your budget to see where you can trim costs to help counter the expense when the payment is due.

When paying credit card debt, the creditor allows you to let some of it roll over month to month. This sort of revolving debt can make payments easier to swallow, but any monthly interest charges will make the debt more expensive in the long run.

For other types of debt, you have two main options:

  • See if you can establish a payment plan with the creditor. Some service providers, such as medical offices or car repair places, offer financing that lets you spread out payments. Make sure you understand all the terms, such as the interest rate and any fees. Also, some medical offices offer financial hardship plans, which can reduce the amount you owe.
  • Try to drum up some extra cash.

Learn more: Click on another stage in the debt timeline below, or return to the full debt timeline.

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Sean Pyles is a staff writer at NerdWallet, a personal finance website. Email: [email protected]Twitter: @SeanLoranPyles