Resources You Can Turn to When Your Debts Start to Become Unmanageable
Saturday, December 19, 2020, 6:00 AM | Leave Comment
In difficult times, a person may acquire more debt than usual, which can have a dire effect on their budget and bill management.
As debt balances climb, you may start to feel like your finances are spinning out of control. This is a positive first step that can spur you to take needful action to get things back under control.
Here are some options to consider.
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Creditor Negotiation
Don’t avoid the people to whom you owe money. Contact your creditors and explain the situation briefly without revealing personal information. You can say something to the effect that your expenses have increased recently or your work schedule has been reduced, based on whatever has led to the problem. Ask if you can skip payments for one or two months to let you catch up on other bills and then resume payments on the current obligation. You could also offer to make partial payments temporarily. Many creditors will appreciate your honesty and work with you without dinging your credit score.
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Consolidation Loan
You may be eligible for a consolidation loan, which can bring together all your consumer debt into one loan at a lower interest rate than you may be currently paying on your credit accounts. This will enable you to protect your credit rating and start paying down the cumulative balance in one affordable monthly payment.
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Debt Management Service
Contact a debt management service to see what they can do to help. If your credit history is not great, they may be able to reorganize your debts with lower interest and help you get a smaller monthly payment. Since they are professionals with financial experience, they may be able to handle the task faster and more effectively than you could.
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Legal Options
If your debt is very high, and you are unsure how to start repaying it and saving your credit, consult a bankruptcy law attorney for advice. You could qualify to file for bankruptcy. The courts will decide whether you fall under Chapter 7 or Chapter 13 bankruptcy laws. Your credit rating will be impacted, but within a few years, you can re-establish a fresh credit record.
Don’t let mounting debt overwhelm you. Check out these options to find relief and to protect your financial resources as well as your credit. In a short time, you can relax knowing that your finances are in good order and on a smooth path to financial solvency.
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