If you have trouble making your monthly payments, you may want to consider debt relief. While the economy has somewhat recovered from troubled times, many people are still feeling the economic effects of the bad economy. But you may not know what type of debt relief you should seek out, because there are so many different types available. While filing for bankruptcy may be a last resort, you can assess your financial situation and determine which type of debt relief is right for you.
Debt Consolidation
Debt consolidation is a type of debt relief that consolidates all of your unsecured debt into one monthly payment. Depending on your credit, you may be able to obtain a debt consolidation loan with a lower interest rate, which would result in your monthly payment being much lower. However, if you don't have the best credit, and the interest rate is more than what you're currently paying separately with your debts, then you may want to consider other forms of debt relief.
Credit Counseling
Credit counseling is another form of debt relief. When you enter into a credit counseling program, you will work with financial and credit experts in trying to learn more about controlling your spending and managing your finances. Many of these types of programs will help you work with your creditors to lower your monthly payment so that you can regain control of the amount of money that you have to pay each month, but still being able to pay your creditors off. If you are looking for a way to avoid bankruptcy, but debt consolidation won't work for you, you may consider credit counseling.
Bankruptcy
Bankruptcy is a form of debt relief that you should only consider if there are truly no more options available for you. There are two types of bankruptcies available for individuals to file, Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves the selling of valuable assets in order to pay off as much of your debt as possible, because all of your qualifying unsecured debt will be eliminated. Chapter 13 bankruptcy does not involve the selling of your assets, but you will be required to pay off all of your debts in a three to five year payment plan set up by the bankruptcy court. If you make too much money, you won't qualify for Chapter 7 and will have to file Chapter 13.
For more information regarding bankruptcy and other forms of debt relief, contact a bankruptcy attorney such as Dennis Lee Burman Attorney at Law.
Share24 March 2015
Filing for bankruptcy has a tendency to make people feel ashamed and stressed out, and can turn into a big source of depression if not handled properly. As a counselor for couples and families, I have worked with various families throughout the years who have had to go through bankruptcy. And during this time, I have seen firsthand how, with the right mindset, going through bankruptcy can make people stronger in their financial lives and careers. I started this blog to provide information about the right things to do and the things that should be avoided while going through bankruptcy to minimize stress and maximize potential once the process is over. If you have any questions or concerns, hopefully they can be addressed on these pages.