Can’t Get a Loan? – Solutions From Ask Bill

Question: My husband and I are drowning in debt. We both have low credit scores and we are one payment behind on our house and car payments. We don't have any equity in our house because we just got it in December. We can't get a loan. What should we do? Please, help!!!

Answer:
First of all, please keep in mind that if you find yourself in a situation where you cannot pay all of your bills each month, most people agree that your mortgage is the last bill you should stop paying - because failure to pay your mortgage could result in losing your home. Your car should be the 2nd to last bill you stop paying for the same reason. The potential negative impacts of going behind on unsecured debts (personal loans, credit cards, medical bills) are not as significant. Therefore, while we would never recommend that you stop paying any of your bills, if you have no choice but to do so, it makes sense to prioritize your house and car payments and stop making payments on your unsecured debts.

Second, if you can’t get a loan, there are many forms of debt relief, including:
(i) Debt consolidation loans,
(ii) Credit counseling,
(iii) Debt negotiation, and
(iv) Bankruptcy.

Debt consolidation can benefit you in many ways: i) monthly cash flow, ii) total savings, iii) interest deductibility, and iv) your credit rating.

Based on your recent credit history, it may be difficult for you to qualify for a debt consolidation loan.

As far as bankruptcy, only an attorney can review your situation to tell you whether or not you qualify for Chapter 7.

Alternatively, a program like Debt Negotiation may lower your monthly payment, get you debt free fast, save half of what you owe, but it could negatively impact your credit rating. If you are interested in Debt Negotiation, follow this link: https://www.bills.com/debthelp/debt/?rbc=ask+bill

These are a few of the considerations. If you would like more information, please visit our debt relief boot-camp

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.

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