Did you hear about the guy who lost his house because of an unpaid parking ticket? In 2004, a Milwaukee resident got a $50 ticket for parking an unlicensed van in his driveway. He didn’t pay the ticket – or the notices that came in the mail and over the next 4 years, the fines and penalties kept adding up, until he owed $2,600. So, the city placed a tax lien against his house and when he didn’t pay that, they foreclosed, and sold the property in order to get their money. The moral of the story is: Don’t let one unpaid bill cost you big-time. Here’s how to repair the 4 most common financial errors that could get you into big trouble, courtesy of Kiplinger.com:
- Going over your credit card limit. Many credit card companies simply deny a charge if you exceed your limit, but others allow the transaction, and slap you with an over-the-limit fee. So, if you overspend, call the bank right away – and tell them you’re sending a check for the difference. Or ask to set up a payment schedule. Be realistic. It’s vital that you follow through with the agreement.
- Getting behind on student loans. Don’t shove the delinquent notices in a drawer. If you’re having trouble making payments, call the lender and ask for a deferment. That can give you an extra 3 years to catch up.
- The 3rd money mistake seems like a big deal, but it’s an easy fix: Shorting Uncle Sam. If you owe back taxes or didn’t file a return, call the IRS and ask for help. They’ll be happy to work with you, and put you on a payment plan.
- Unpaid parking tickets. Many cities turn tickets over to collection agencies. So, even if you got a ticket out of state, the debt can come back to haunt you. If you tossed the actual paper ticket, contact the DMV in the state where you got written up, and pay it. It can save you hundreds, if not thousands of dollars and a world of trouble.
Bottom line: No matter what the problem, you’re better off facing it. So, pick up the phone and call the people you owe. Believe it or not, they often figure that some money is better than no money, and might even reduce your debt.