Work with your Creditors
- Ask the creditors to lower your monthly payment that you can afford
- Ask the creditors to lower the interest rate
- Ask the creditor to allow you to pay interest only for short period of time
- Be nice to the person you are talking to. They can help you big time
- If the person does not agree, ask her you would like to speak to supervisor
This might sound like a bad idea but it works if you do it properly. The process is called debt consolidation. Make sure you meet all the following requirements before you do debt consolidation
- Combined new interest rate is lower than the previous interest rates
- Combined new payment is lower than the previous combined payment
- New interest rate is fixed interest rate and not a variable interest rate
- Never use the credit card again until you pay off all the previous debt
Credit Counseling Agency can be godsend when you have lots of debt and are struggling to make payments. It is very important to choose them especially when you are confused and struggling to manage the money by yourself. Credit Counseling Agencies can
- Help you negotiate lower payment with your creditors
- Teach you how to manage financial matters
- Help you setup a budget that can help you debt free lot sooner
- Credit Counseling Agencies should not charge you any upfront fees
- Find a reputable Credit Counseling Agency near you.
Filing for Bankruptcy
Something it is better to file for bankruptcy especially if you owe too much in debt and less income. Use the following resources to decide if bankruptcy is a good option for you.
- Chapter 7 wipes out most of the debt but not all
- Chapter 13 is reorganization bankruptcy which gives you 3 to 5 years to pay off your debts.
- If you believe one of your creditors is coming after the asset you owe it is better to file for bankruptcy.
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