Hitting the Financial Bottom: 3 Options for You to Consider to Prevent Debt from Ruining Your Life

If you are unable to pay your debts, it’s always advisable to seek professional assistance as soon as possible. Taking prompt actions against such cases helps remedy your financial situation. Unfortunately, finding solutions to one’s debts is not as easy as it sounds. If you find yourself hitting the financial bottom as a result of your debts, here are a few strategies to consider.

Hitting the Financial Bottom: 3 Options for You to Consider to Prevent Debt from Ruining Your Life - debt worries image

Debt Management Plans

These kinds of plans make it possible for you to settle your unsecured debts in full, but often with fees waived or with reduced rates of interest. A debt management plan allows you to make a single payment to the credit counseling agency every month. The payment made is then distributed among your creditors. With this approach, however, you will have to live without your credit cards because they will be closed until the plan is completed. Although the debt management plans cannot affect your credit scores, closing the accounts will most definitely do. Therefore, make sure you apply for credit cards again once you have completed the plan.

Bankruptcy

There is little or no point of entering a debt management plan if you cannot pay as agreed. You can always talk to a bankruptcy attorney before you can decide to pursue any relief plan. Most attorneys will not charge for the initial consultation, so do not fear approaching one.

The most common type of bankruptcy is Chapter 7 liquidation and this can be used to erase the unsecured personal loans, credit card debts, or even medical debts. If you qualify for this process, debt relief can be done in a period of 3 to 4 months.

You should note that not every individual with an overwhelming amount of debt qualifies for debt relief through bankruptcy. For your family size and state, if your income surpasses the median, you may be required to file Chapter 13.

There are numerous law firms that can offer the professional help you need. Make sure you search around to ensure you are working with the best bankruptcy attorney in your area. You may also consider visiting www.steinbergerlaw.com/ to learn more about Chapter 7 bankruptcy.

Debt Settlement

This approach should always be the last resort when it comes to seeking debt relief. Debt settlement organizations often ask debtors to stop paying their debt and place their money in their controlled accounts instead. As the money accumulates, the company approaches every creditor, and you as the debtor continue to fall further behind payments. This approach may work since the fear of not getting anything may prompt the creditors to accept any form of settle even when it means getting a smaller lump-sum, as long as they agree not to pursue the debt any longer.

However, with this approach, you subject yourself to collection calls, potential legal action, or even penalty fees. Debt settlement cannot stop any of these from happening while the negotiations are still ongoing.

Last Words

When you are about to hit the financial bottom, make sure you consider the three options above. Best of all, make some time to talk to a bankruptcy attorney to get all the help you need when seeking debt relief.

 

What Happens When You Get Stuck In A Financial Ditch

What Happens When You Get Stuck In A Financial Ditch - spilled coins and cash

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It doesn’t matter who you are; money is always going to be an important part of your life. You might think that that’s not the case. That you only do the job you do because you’re passionate about it, and that you and your family can get by without lots of expensive things. And this is probably true, but money rules more of your life than just those things. After all, the food on your table and roof over your head are all there because of the fact that you can afford them. Now, you might not think that that’s fair, but that’s the way things are in the world. And because of those things, it’s often a lot easier than many people realize to get into some serious financial trouble. People assume that they’re finances will always be secure, but that’s simply not the case. Of course, people then assume that, once they’re in financial trouble, there’s nothing that they can do to get out of it. However, that’s not the case either. With that in mind, here are some things that you can do in order to pull yourself out of a financial ditch.

Consolidate your debts

One of the very first things that you’ll want to deal with when you’re trying to pull yourself out of financial straits is your debts. Debts can often feel like a black mark on your entire life and getting out of debt alone can feel like an impossible task. One of the very best things that you can do in order to minimize the debt in your life is to consolidate them. Trying to stay on top of multiple debts can be incredibly difficult and overwhelming, so consolidating them down into a single payment can make life a lot easier. Not only that but you may even be able to reduce your overall monthly expenses this way.

Downsize

You may have become accustomed to a certain standard of living but when you’re in financial trouble the time has come to start making some compromises. The first and most significant compromise that you can make is your home. Your mortgage payments will likely be the most significant expense to come out of your home and downsizing can reduce that burden considerably. Companies like Repossession Stoppers are specifically in place to help those dealing with financial problems get back into the black. When you’ve sold your home, you can think about moving somewhere smaller and cheaper, at least until you’re back on your feet.

Cut back

Of course, your home isn’t the only thing that you’re going to be spending money on. You also need to think about other places where you may be able to make some cutbacks. Things like luxuries can go until you’re more secure. The same goes for your grocery shopping. Don’t always go for the top shelf items that are more expensive. You can often halve the cost of your food shop just by getting non-branded items when you go grocery shopping.

Reach out for help

One of the biggest mistakes that a lot of people make is that they refuse to talk to anyone about the financial problems they’re having. They feel ashamed of what they’re going through and are frightened that people will judge them for it. Of course, the truth is that you probably have plenty of people in your life who would be more than happy to lend you a helping hand when you need it. The idea of asking to borrow money from anyone in your life can be scary, but the wellbeing of you and your family is more important than preserving your pride. Not only that but there are plenty of debt based and financial charities out there that you can talk to about your problems. They will be able to help you figure out exactly what you need to do in order to make the most of your current situation and get your finances back on track.

It’s often incredibly easy to feel as though you’re all out of options and all out of hope when you find yourself at the bottom of a financial pit. However, it’s important that you remember that, no matter how difficult things might get, there are always things that you can do in order to get out of it. Sure, these things might seem small, and they may take time, but sticking with them really can make all the difference in helping you and your family feel secure again.