What To Do If You Are Struggling With Debt

What To Do If You Are Struggling With Debt
Photo by Aza Raskin – CC BY 2.0

Many individuals are struggling with debt and do not know how to go about getting out of debt. Some individuals may stop paying the debt altogether. By not paying the debt, your credit score will decrease and it will show negatively on your credit report. In order to manage your debts without affecting your credit report or score, you will need to choose between one of the debt solutions. So what to do if you are struggling with debt?

Debt Settlement

With debt settlement, you are paying off your debts with one lump sum. In order to get started, you will need to gather all of your bills and choose the one that is giving you the most trouble at the present time. Decide how much you can afford to pay the debt collector in order to settle the debt. The debt amount can be as low as $500 for a $3,000 debt. Contact the bill collector to let him or her know how much you are willing to pay to settle the debt. The debt collector may not want the amount, but you have to let him or her know that this is what you can afford. If they refuse to take the amount, move on to the next bill. Offer at least $500 to each debt. Pay each debt out one at a time.

Pay More Than The Minimum Each Month

By paying more than the minimum, you will eliminate the interest, which will allow you to remove the debt faster. You may want to work with one bill at a time, so that you don’t overdo it. You should still pay your other debts the same as you have been.

Enroll in Debt Consolidation

Debt consolidation involves a debt management counselor contacting your debt collectors to get you a lower interest rate, so that you can pay off your debts sooner. You can receive a loan or pay your money to the debt counselor each month, so he or she can distribute the money to your debts. In order to enroll in a program, you will need to either go online or check in the phone book. Check to see if the debt management company is legit by going to the Better Business Bureau Web page. Speak with the counselor over the phone or in person to get started. Fax in any paperwork. Make your payments to the debt consolidation company on time each month.

File for Bankruptcy

Bankruptcy should be your last resort. Bankruptcy stays on your credit report for 10 years. It involves getting a bankruptcy lawyer and paying a fee. In order to eliminate your debts, you will need to file for a Chapter 7 Bankruptcy. There are steps you’ll need to take in order to file for a Chapter 7 Bankruptcy. These steps include paying your fee and credit counseling. The lawyer will give you a date when you will appear in bankruptcy court. You may or may not have to speak in court. It all depends on who your lawyer is. It takes just a few minutes.

Post Comment

*