Saturday, September 3, 2016
What To Do When It Looks Like You're Running Out Of Options Financially
When you’re in significant financial trouble, it can feel like the walls are closing in on you. There always seems to be a new letter of some debt or bill coming through the door. It’s easy to succumb to the pressure, but you need to stay strong and always keep an eye out for alternatives. Sometimes, even the worst situation can have a solution. It won’t always be pretty, but you need to take action.
The first thing we can advise is a step that way too many people miss out on. Perhaps they feel embarrassed about talking to their creditors. Or they could feel nervous about getting themselves in even more trouble. The idea that creditors will jump to bite a chunk out of those in debt to them isn’t entirely true. In most cases, they’re a business that relies on reliable relationships with their customers. If they know that a situation is so bad that you risk losing everything, they may be able to give you more wiggle room to come to terms with what you owe. Being savvy about negotiating with them is important, too. Stay calm, stick to your story and try as much as possible to stay in dealings with your creditors, not their collectors.
Look at your lines of credit
If you’re in debt, you need to be operating on a plan of how to pay. You need to budget with a good 10-20% of your income going towards paying off debt. Similarly, you need to pay towards the debt that will cost you most. For example, those with particularly high-interest rates. At the same time, you can look at how you might move your credit around to make it easier to deal with. If you have a home, you can avoid going into collections and increasing interests by using a loan insured by your home. You can also look into consolidating your higher interest loans to a better deal.
A clean slate
Sometimes, all the shuffling around in the world isn’t enough to help you deal with debt. If a situation is looking truly insurmountable, then you may need to think about taking a further step. A bankruptcy attorney will let you know that it isn’t the end of the world. At the same time, it’s a choice with far-reaching consequences. Your assets will be looked into and seized as a means of paying as much of your debts as you can. Your credit will also take years to recover. However, it can be better than struggling fruitlessly for years to pay off debts that you’re unable to afford. If you feel like you’re in that situation, talk with someone experienced to get an idea of how to move ahead.
Even the most drastic of these options isn’t without real merit. The truth is that sometimes you just have to bite the bullet. Face your anxieties head-on and take steps to fix your situation. Otherwise, you will be dealing with the stresses of a poor financial situation for way too long.