Finding yourself in debt is no fun. Unfortunately, locating information on ways to get back to a solid financial ground can be difficult and frequently confusing. Hopefully, a few minutes with this article will help clarify the landscape and provide a logical starting point.
If you have a small amount of debt you may be able to take control directly. Often, people will be underwater by only a few thousands dollars and struggling because of a high interest rate. What people often don't consider is that you can call your credit card company directly and ask to change the terms of your debt. Very few people would buy a house or a car without haggling a least a little bit - extend this mentality to your credit debt. Your credit provider will likely be willing to work with you in order to help you avoid bankruptcy. If you go bankrupt they will receive no money so it behooves them to be flexible. Keep in mind that your credit limit will likely be lowered to your outstanding debt amount.
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If you are not the do-it-yourself type or have a balance on multiple cards, you might want to call a financial counselor. Such a counselor can assess your entire financial situation and suggest changes to your budget that will enable you to free up money to pay down your credit debt. Often the support of a third party will help you stick to a new financial plan. Credit counselor typically charge a small fee of less than $50.
If your situation is more dire, you might need the help of a credit counseling agency. The agency will contact all of your creditors and negotiate better terms so that you can actually service your debt and not fall further and further behind. In fact, they are often able to cut your interest rates in half or less. Usually, late fees and over limit fees stop as well.
Once a plan is in place, you pay a lump sum to the agency who distributes the amount across all of your creditors. Agencies typically charge a monthly fee of $20 to $40. Expect to be working with the agency for several years.
If your situation is so dire that an agency would be unable to help, you may need to file bankruptcy. This may be the case if you are many thousands of dollars in debt and lost your job. Or perhaps you have hundreds of thousands of dollars in medical bills. Bankruptcy is generally to be avoided so make sure your situation really is unrepairable before choosing this option. However, getting a clean start is better than suffering through the pain of a debt you can't possibly repay.
If bankruptcy is needed, be sure to contact several attorneys that specialize in this area of law. You don't want to be somebody's experiment into a new practice area.
It is common practice for an attorney to offer a free thirty minute consultation. Be certain to ask many questions during this time to make sure you are comfortable with the attorney and the firm. They are going to be dealing with a very personal part of your life and discomfort is not helpful to the process.
Taking action on some level now is much better than waiting no matter what your situation is. Time is not on your side when you have a debt load that you are not servicing well. Pick up the phone and call for help - today!
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