Information on help with debt to avoid bankruptcy - The Bills.com Blog
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Information on help with debt to avoid bankruptcy
Question: Dear Bill, We are in debt by 35,000. Debt consolidators want too much for their help, more than we can afford. we have a budget and have cut back where we could. Collectors calling, poor credit, no chance of a loan to bail us out. What do you suggest now? Bankruptcy is out of the question. HELP!
Answer: I can think of several possible solutionsto your problem, depending on how old the debts are, your financial situation and how much money you can afford to allocate to your debts on a monthly basis. If you follow the links below, I can put you in contact with a company that may be able to assist you in resolving these debts.
Very quickly, if you want a free debt consultation with one of Bill's approved debt help partners, click here: http://www.bills.com/debthelp/debt/.
If you own a home, a secured debt consolidation loan may be right for you. This type of loan is essentially a home equity loan, which is used to pay off your other creditors. Secured consolidation loans help many consumers by consolidating all of their debts into a single monthly payment with a lower interest rate and payment amount. Unfortunately, with the recent tightening of the credit markets, obtaining a debt consolidation loan may be difficult given your poor credit rating. However, if you have a friend or relative with good credit who is willing to co-sign a loan with you, a consolidation loan may still be an option. You must weigh your options carefully before you borrow money against your home to pay off credit cards and unsecured loans; you are converting what was previously unsecured debt into secured debt. This could cause you problems down the road if for some reason you are unable to make your payments, or if life circumstances force you to file bankruptcy, as you may not be able to discharge the secured debt as you would unsecured debt. However, secured debt consolidation loans work for many people, so this is an option to consider carefully?the Bills.com
Savings Center is a great resource to help you find a lender for this type of loan.
Bills.com makes it easy to compare mortgage offers and different loan types. Please visit the loan page and find a loan that meets your needs at: http://www.bills.com/mortage/refinance/.
Another option to consider is a Consumer Credit Counseling Service, or CCCS. CCCS companies offer numerous services, such as financial counseling and budget planning, as well as Debt Management Plans (DMPs). In a DMP, the CCCS would arrange a new payment amount with each of your creditors, usually based on a reduced interest rate. You would then make a single monthly payment to the CCCS which would distribute the funds to your creditors, based on the new payment amounts. There are several drawbacks to CCCS, though. First, depending on your creditors, it may not be able to reduce your monthly payments enough to improve your financial situation. Second, it may have a negative impact on your ability to obtain a loan, so you may not wish to enter into a DMP if you anticipate any large purchases, such as home or an auto, in the near future. Third, the average DMP takes around five years to pay off your debts, so you must be willing and able to commit to a long-term repayment plan.
You may also want to consider the services offered by debt settlement firms. Rather than making monthly payments to your creditors, these programs negotiate lump sum settlements with your creditors, frequently reducing your debts by 50% to 60% of your principal balances. These programs usually take only 2-3 years to complete, so this is a good
option for many people to rid themselves of debt in a relatively speedy manner. In many cases they can also reduce your monthly payment toward your debt. There is one major drawback to debt settlement programs, though?they will significantly damage your credit while in the program and for at least a year or two afterwards. However, if you are currently unable to afford to pay your creditors, the hit to your credit may be worth the benefit of ridding yourself of credit card debt.
Finally, I understand that, like you, most people are adamantly opposed to filing bankruptcy. However, if you find that the possible solutions I mention above are not able to help you resolve your debt crisis, bankruptcy may be the only option left open to you. I encourage you to speak with a bankruptcy attorney before ruling out bankruptcy off altogether. You should be able to find an attorney in your area willing to provide you with a free consultation. Speaking with an attorney will allow you to fully understand the bankruptcy process, providing you with the information needed to make an informed decision in regard to bankruptcy and the other debt relief options available to you.
Depending on your income, credit score, and the type and amount of debt, one of the several options I have described above may be able to help you. I encourage you to explore the Bills.com website, http://www.bills.com/debthelp/, to read more about these and other options available to you.
I hope this information helps you Find. Learn. Save.
Good Luck,
Bill
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
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Bill has answered all sorts of questions and has been able to provide those in need of financial guidance with helpful and valuable advice and information on their specific financial area of interest. If you need specific guidance on any of the above mentioned financial areas, feel free to Ask Bill your financial questions and get better informed. Also, make sure to get a free financial health check-up with Bills IQ!
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