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Making the Choice for Bankruptcy

>> Sep 8, 2016



When you have always been financially responsible, it may have seemed to you that people who filed for bankruptcy were just careless with their money and spent too much on the frills and not on the necessities. Once you are the one who is facing a mound of debt that you can’t seem to meet, you understand how your situation can change quickly and without warning. Eidelman and Associates explain that debt can become a problem over time or suddenly following a single event. Making the choice to go to a bankruptcy attorney can feel like surrendering to the easy way out.
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Some people choose to try other options before resorting to bankruptcy. If credit card debt is their problem, they may call the credit card companies and try to get their balances lowered in return for paying their total bill. Many people cannot take this option even if available since they lack the funds to make multiple payments, even at a reduced rate.

They may look to debt consolidation as a way of combining a number of small debts into a single large one that requires only one payment each month. Some spend months on a program before realizing it isn’t the best option for them.

The Problem with Debt Consolidation
Before many people make the decision to get a bankruptcy attorney, they consider debt consolidation. There are two basic ways that this works. You may seek out a debt consolidation loan through a lending company to pay off all of your smaller bills and make a single monthly payment or go through a debt consolidation company and hope that you get the results they promise.

The problem with the first method is that most lending institutions are not going to loan you money when you are already struggling to pay your bills. However, if you own a home and have equity built up, you may be able to take out a personal loan to pay off the debt. Without any assets to secure the loan, you are more likely to be limited to the second method.

A debt consolidation company will negotiate with your creditors to get your interest rates reduced. You will make a payment to the company each month that will include the agreed upon amount you will pay each creditor and the fees the company charges. The problem with this method of debt consolidation is that for every reputable company there are many more that are not. It can actually take you years longer to pay off your debts than they would have originally taken because you may be paying a great deal more in fees than you are to some of your creditors.

Just as bankruptcy can impact your credit, so can entering debt consolidation. You probably won’t have any opportunity for credit until you have completed the program and paid off all your bills. Once you have established a payment schedule, you may find that you are having problems meeting these as well. If you do, you will probably be thrown out of the program and left to deal with your debt once again.

Talking with a bankruptcy attorney when debt first becomes overwhelming can give you more insight into your options and help you make the best decision for your situation. Don’t put off contacting a bankruptcy attorney when it could bring you peace of mind.

Sources:
1. http://www.cfinancialfreedom.com/debt-consolidation-doesnt-work/
2. https://www.legalzoom.com/articles/bankruptcy-basics-when-should-you-throw-in-the-towel
3. http://www.nolo.com/legal-encyclopedia/bankruptcy-filing

1 komentar:

sm September 9, 2016 at 2:44 AM  

nice post
trump is expert in these matters.

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This blog contains articles in family topic.
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