Since it's so easy to get credit these days, it's no surprise that so many people have too much debt. If you're slow to pay or often forget to pay, you're not the only one. You should think about the following options before you file for bankruptcy.
Loan for combining your debts
One solution is to get a loan to pay off all your debts at once. You will find a lender who will give you enough money to pay off all of your debts. You pay off your debts and make one monthly payment on your consolidation loan. This is done to avoid having to pay off a lot of different creditors.
You will save money in the long run if you can find a consolidation loan with a lower interest rate than what you are paying now.
Some people use a home equity line of credit or a personal loan from the bank to pay off their debts. Again, you won't have to pay finance charges as long as the interest rate is lower. If you can't get an unsecured loan, you might want to try getting a secured loan instead. A secured loan is one that is backed by collateral, which is usually your house or other things you own.
Credit Counseling
Talking to a credit counselling agency is another way to deal with debt problems. A qualified agent will look at your finances and take the steps you need to get your debt under control. Most likely, they will talk to your current creditors and try to work out new payment terms, such as a lower interest rate or a smaller monthly payment. You can search online or look through the phone book to find a good credit counselling service. Make sure to find out if the agency is real by asking about fees and accreditation.
You will also meet with a credit counsellor to talk about your financial future. They will teach you the basics of managing your own money and help you make a budget you can stick to. They may sometimes tell you to cut up your credit cards so you don't get into more debt.
Debt Management Programs
Most of the time, you can find a debt management programme on your own or through a credit counselling service. An agent will look at your finances and ask you a few questions to make sure you qualify for the programme. They will probably work out payment plans with your creditors to make your debts easier to pay. Then, they'll add up all your debts and figure out how much you have to pay each month for all of them. You just send a payment to the agency, and they'll make sure your creditors get the right amount.
Again, you should do research to find a good programme to help you deal with your debt. Find a non-profit organisation that has been approved or recommended by a group you can trust. If you hire a less-than-legitimate company to help you, you could end up in more financial trouble. This is because some companies will hold on to your payment longer than necessary so that they can make money from the interest on your money.
