Debt ReliefPosted on September 12th, 2010 William No comments
Feeling overwhelmed by your bills? One of the worst feelings in the world is that of being overwhelmed by your debt, of being in the hole and not knowing how to get out. Fortunately, there is help available; while there's no quick fix, there are things you can do to help remove yourself from the trap you're currently caught in.
- Credit counseling is a good idea before you try anything drastic; a trainer counselor can help you make sense of your options. You should be able to find free or low cost counseling; don't pay a lot of money to have someone tell you what to do!
- Debt consolidation: in this case, you bundle all of your debt (or at least some of it) into one bill, preferably at a lower interest rate. This can make debt feel more manageable as you have fewer bills to pay each month. However, one is bigger! This is a good option when you can lower your rates, and thus the overall amount you're paying. Read the fine print carefully; you don't want to end up paying more than you currently are!
- Debt negotiation involves convincing your creditors to accept less money than you actually owe them, which is extremely difficult to do while you're still paying your debts! However, if you're totally overwhelmed and don't see how you're going to be able to pay your bills, it's worth a shot.
- Bankruptcy is the option of last resort; while this can wipe out your debt, it's very difficult, is a stressful process, and will destroy what's left of your credit rating. Additionally, it stays on your report longer than other pieces of information and can make it very difficult to find credit, rent an apartment, or even get a job! Bankruptcy should only be considered if you have no other way out.
While it would be nice, don't believe the companies that claim they can remove most of your debt. While there are ways to achieve debt relief, your creditors are in business to make money, and if they believe that you have the ability to pay, they're going to try to make you pay!
Similarly, watch our for credit repair firms that make unrealistic claims. While the credit bureaus will remove any errors in your credit report that are brought to their attention, they cannot just delete information because you asked, so beware of anyone who claims they can remove all the negative information from your report! While there are definitely steps that can be taken to improve your credit, there's no reason to pay a company hundreds of dollars; you can do them on your own. Start by getting your free credit report and checking for inaccurate information; if you find any, send the credit bureau a letter telling them that the information is inaccurate, and if they cannot verify it, it will be removed. It's also good to purchase your credit score and be familiar with the credit score scale, so that you know exactly how bad your credit actually is.