Facing Bankruptcy? Here’s What You Can Do
Tuesday, October 29, 2019, 6:00 AM | Leave Comment
Life sometimes hands you lemons. You may be facing medical issues, lost your job, or are living paycheck to paycheck.
Whatever the reason for your financial troubles, it doesn’t make it any easier to handle.
What are your options if you are stretched thin and don’t know how you are going to pay your bills?
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Lender Based Debt Consolidation Loans
If you’ve managed to keep your credit clean, then you may be able to get help with a consolidation loan. These should not be confused with repayment plans from a consolidation company. You must go to a bank or other lender to have them pay off all your credit cards and other bills. Then, you make one payment each month to the bank, which is like a personal loan. They offer significant savings by reducing interest costs. However, you must have good credit to qualify.
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Debt Consolidation Repayment Plans
If your credit is damaged due to financial issues, then you may want to work with a consolidation company. These are not loans but rather a way out of debt. These companies work with your creditors to negotiate settlements. You send one payment each month to the company, and they pay your bills. The fees are usually minimal, and they have a proven track record of success. The only catch is that you must have the funds to repay the debts.
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Filing for Bankruptcy Protection
For some, bankruptcy is inevitable. If you don’t have the money to pay back even a portion of your debts, your credit is shot, and your facing foreclosure and repossession, then you need the court’s help. You need to take the Means Test to see if you qualify for a Chapter 7 or Chapter 13. Chapter 7 is a total liquidation, while Chapter 13 lets you pay back a portion of your debts over three to five years.
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Negotiate with Your Creditors
Most creditors are eager to work with you on your past-due accounts. If your home is facing foreclosure, then a short sale, loan modification, or a quick cash sale may be the best option. It’s free for you to negotiate and create a plan with your creditors that fit your needs. Remember, they would rather work with you than against you. It saves them time and money to settle the debt with the debtor directly.
Getting Back on Your Feet
Dealing with financial turmoil is never easy. It’s embarrassing to go without things you need and to be in constant worry as you dodge bill collectors. You can take control of your financial history by cleaning up the past. Start by working with your creditors, and if you can’t find a resolution, you can always file for the court’s help through bankruptcy. The goal is to change the situation so that you don’t make the same mistakes again.
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