Should I file for bankruptcy? Or are there other options?
When debt gets bad enough that you worry about never being able to pay it off, you may begin to think that bankruptcy is the only option available to you. This is a very serious choice and may not be the most prudent decision. Most financial experts agree that you should only file for bankruptcy if it is the absolute last choice open to you and your family.
The Downsides of Bankruptcy
First of all, filing for bankruptcy is one of the most serious hits on your credit score you could ever receive. Going forward, you will find it extremely difficult to apply for loans on credit cards, automobiles, business expenses or home purchases. You may even be turned down for employment opportunities, which can bring additional financial hardships. While bankruptcy wipes the slate clean on your unsecured loans, it is not the ideal way forward for most families.
Debt Consolidation: the Safer Alternative
For most families considering bankruptcy, debt consolidation programs like the ones offered by CreditGUARD may meet their needs. First, you work with a consolidation professional to set a monthly amount that you can afford to pay creditors. Second, the consolidation program will be a middleman between you and your lender to get you a lower interest rate. You might be surprised at how much a lower interest rate can change your feelings about your debts. You could drastically reduce the time it takes to get out of debt, and depending on how much money you have on your cards, the savings from debt consolidation can be thousands or even tens of thousands of dollars.
The Importance of a Debt Management Plan
If you have a plan to deal with your debts, if the plan is workable and if you can live within its constraints, then you have nothing to fear. Debt consolidation programs provide a framework around which you can build your life going forward, so you don’t have to worry that bankruptcy is the only option available to you.
Do you remember that class in high school that taught you how to make a budget and discussed using credit cards wisely? Yeah, me neither. While it would have been ideal to have a class that prepared you for a future that included credit cards and the possibility of debt, that is not the case for most.
There are thousands of people in the U.S. who find themselves struggling to pay all their bills, and some of them use credit cards as a temporary solution. Unfortunately, that still leaves them with their regular monthly bills, but now they have added credit card debt to their monthly payouts. Fortunately, there is a way to get out of debt and stay out.
Debt consolidation services can help you organize all your credit card bills and pay them off. An experienced debt counselor will contact your creditors and negotiate a lower monthly payment that you can afford. The counselor can also talk with the creditors to lower the interest on the debt and sometimes waive the fees. Then you make one payment to the debt consolidation company, and they distribute it to your creditors. This takes a great weight off your shoulders every month.
An ideal debt consolidation service like will also include a credit counseling service for their clients. It is just as important to learn how to manage your finances as it is to get help with debt. Credit counseling will help you develop personal budgeting and money management skills, so you can avoid falling into the debt trap in the future. The credit counseling service can also show you how to manage your credit, so you can rebuild it.
When calling debt consolidation companies, look for ones that offer free, no-obligation consultation. You will review your bills with the specialist, and they will help you develop a debt management plan.
By consolidating credit card debt, you will find financial and emotional relief that you can carry with you as you go on to build a stable financial future.
While it’s easy to use a credit card to pay for a purchase you can’t quite afford, it’s even easier to find yourself in over your head in crushing debt. Because of the ease with which one can finance their lifestyle, millions of Americans wind up with a debt burden that exceeds the rest of their bills put together. Once it reaches this point, it can be difficult to find a way back to shore. If you want to get out of debt once and for all, here are some actions you can take today.
Know Your Challenge
You wouldn’t enter into a game without a clear picture of the objectives. Nor should you attempt to get out of debt without really knowing what you’re dealing with. Before you start making plans to pay off your credit cards, take a long, hard look at your debt. Calculate exactly how much you owe, how much you’re spending in interest fees each month, and which accounts are costing you the most. From there, you can start developing a plan of attack.
Amass Your Arsenal
You can strive to pay down your debt, but if you don’t have the resources, it won’t happen. It’s time to be realistic about your options. Do you make enough money (subtracting necessities like the mortgage, car payments and food expenditures) to make a dent? Some people don’t. If you’re that far in over your head, it may be time to look for help. Debt consolidation companies like CreditGuard of America can help you negotiate with your creditors and find a reasonable way to get out of debt.
Make a Budget
A strict, no-nonsense budget will help you recover from debt and pay your lenders in the fastest possible way. It’s important to be realistic when creating your budget. In the excitement of finally reducing debt, many people make the mistake of under-budgeting. In other words, don’t leave yourself $10 a week for food and plan to live off bananas and ramen noodles. It’s fine and dandy to be thrifty, but make a budget you can stick to for as long as it takes to pay down your loans to get out of debt.