When you are under massive amounts of debt, it may be more than you can handle on your own. It could be helpful to consult with another person, a neutral third party perhaps, about your debt and what you can do about it. There are several options available to you for consultations about debt.
An Accountant
If you have used an accountant to do your taxes in the past, he should have a fairly good picture of your personal financial position and may be able to offer you helpful advice concerning debt. Accountants are particularly skilled at calculating debt to income ratios, and can probably advise you on how your situation compares with that of other people. On the other hand, an accountant usually charges by the hour, and if you are in financial trouble, you may find it difficult to pay the fees for services that might be available elsewhere for less money.
A Debt Settlement Company
Debt settlement companies claim that they can settle your debts with creditors, often for pennies on the dollar. Companies do this by collecting your monthly payments, and holding them in an account until there is enough money to offer a settlement to one of your creditors. Some debt settlement companies charge very high fees, often before they have even performed any work for you. Also, your creditors do not have to work with these companies, so there is no guarantee that they will be able to do settle anything for you. Be aware that some debt settlement offers are outright scams, so proceed with caution if you choose this method.
A Credit Counselor
Credit counselors operate by talking with you about your financial situation and helping you to create a budget that is livable for you. They may provide financial coaching as to how to save money on goods and services that you use regularly. Another service that debt counselors provide is that they may negotiate with your creditors for reduced interest rates or reduced payments. This can help you to get back on track with your finances and bring debt under control. Some counselors collect the sum of all of your monthly payments, and then pay your creditors for you. If you give a counselor that much control, make certain that you verify that the payments are being made to your creditors to prevent fraud.
A Bankruptcy Attorney
Often, this is a last resort for debt solutions, but any other ethical financial professional should refer you to a bankruptcy attorney if it appears to be your only option. A bankruptcy attorney will consult with you about your total debts and any assets that you own. He can counsel you on what the effects of bankruptcy are, both on your credit and on your assets. If you choose to proceed, he can take calls from your creditors, ending the harassment while you prepare to file. Bankruptcy results in the elimination of many eligible debts, giving you a chance to start over financially again.
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