Emergency Debt Relief Options

When you are struggling with debt, every month gets harder and harder to make those ever-increasing minimum payments. Do you have any options? Is bankruptcy your only choice? If you are facing a debt emergency, it is time to learn about emergency debt relief options and how they may apply to your situation.

Types

If you find yourself in a debt emergency, which is a situation where you absolutely cannot pay the minimum payments on your debts, you have some options. One is to declare bankruptcy. This will allow you to unload some of your debts, but it will greatly damage your credit rating. Another option is to work with a debt relief company to negotiate with your creditors to lower the amount you owe. Another option is to consolidate your debt into one loan that has a lower monthly payment.

Misconceptions

Many consumers mistakenly think that bankruptcy is their only option when facing an emergency debt situation. While some consumers may have to declare bankruptcy, many can negotiate with their creditors in order to lower the amount they have to repay and avoid bankruptcy. Most creditors realize that consumers who owe thousands upon thousands of dollars are never going to be able to repay the amount, so they are willing to negotiate a lower amount in order to get some money, verses having the debt removed in bankruptcy court.

Considerations

If you are facing a debt emergency, the first thing you need to do is consider your budget. Are you spending more than you make on a regular basis, or was the debt the result of unexpected and unusual expenses? If you are regularly spending more than you make, no amount of emergency debt relief is going to help, because you are going to remain in this cycle. You need to adjust your spending or income. If the debt was a result of unexpected circumstances, debt relief may help.

Warning

There are many websites and companies who are willing to prey on consumers who are facing a debt emergency. Before you sign up for emergency debt relief help, make sure you know what you will receive. Do not pay a lot of money for someone to help you file bankruptcy. Instead, look for a company that offers credit counseling in conjunction with debt relief options like creditor negotiations or consolidation loans. This will help you avoid repeating your mistakes while you dig your way out of debt.

Expert Insight

Emergency debt relief is not for everyone who has debt. Most companies offering these services only take on clients who have more than $10,000 in consumer debt, not including mortgages. If you are struggling with your debt but do not qualify for these programs, try to take some steps on your own. You can find a consolidation loan or negotiate with your creditors on your own and save money in the process. Also, make sure you are not paying a debt relief company to do what you can on your own, even if you qualify for their services.