Debt assistance may be necessary if you have been undisciplined in making and sticking to a debt reduction plan on your own, or if the idea of tackling your debt is just too overwhelming. You can seek counseling or hire a third party to help get your debt under control.
Talk to a Credit Counselor
A credit counselor can guide you through the process of handling your debt obligations. They can offer advice, tips and suggestions for tackling your debt burdens. Speak to friends to get a recommendation or refer to the Better Business Bureau for a reputable organization. You also can visit a nonprofit agency, such as the National Foundation for Credit Counseling, that offers free or low-cost counseling.
Debt Settlement
If you are too deep in debt to dig out and are considering bankruptcy, seek the option of a debt settlement with your creditors first. A debt settlement allows you or your representative to negotiate a reduced debt amount with your creditors. This new amount should be more manageable to handle, allowing you to pay off your debts.
How to Settle
You can speak directly with your creditors or seek the help of a debt settlement company. You (or your representative) enter into a negotiation period, which can last about six months. Your creditors may be willing to negotiate a lower amount because they may fear they would receive no money if you were to file for bankruptcy.
Warnings
If you are to engage in a debt settlement, you may be required to stop payments on your bills for up to six months to show creditors you are behind on your payments. As long as you're making monthly payments, creditors have no reason to believe you will stop. Payment timeliness accounts for 35 percent of your credit score, resulting in a significant dent to your credit score, so expect your score to take a hit. Forgiven debt also will have a negative impact on your credit report. Finally, be cautious when choosing a debt settlement company, as some are not reputable.
0 comments:
Post a Comment