#consolidating credit card debt
If you have more debt than you can manage it might seem frightening, and is probably highly stressful. Know that there is help available to you, no matter what your situation is.
It s important to take action and/or get help as soon as you realize you re in too deep. Waiting will only put you further into debt (and possibly put more gray hairs on your head).
You may be able to consolidate your debt into one loan, (and one loan payment per month). But before you get a debt consolidation loan, make sure to compare the total of the payments you now make with the amount you d pay with the consolidation loan to make sure it truly is a better choice.
You may want to enlist the help of a professional, who is trained and ready to provide help with budgeting and payment reduction plans. The National Foundation for Credit Counseling can help you find a reputable credit counseling organization. Their credit, housing and bankruptcy counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting.
A good credit counselor should discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems.
Debt management plans
A credit counselor may recommend that you enroll in a debt management plan. Under this arrangement, you deposit money with the credit counseling organization, which uses your deposits to pay your unsecured debts, like your credit card bills, student loans, and medical bills, according to a payment schedule the counselor develops with you and your creditors.
Make sure your credit counseling organization is legitimate and reputable before you enter into any debt management plan. The National Foundation for Credit Counseling can help you find a reputable credit counselor.
Bankruptcy is a legal procedure of last resort for someone with significant financial difficulty, who can find no way to satisfy their debts. Bankruptcy is a major life event, and the results are long lasting and may be difficult to overcome. For example:
- You could lose most of your property and assets.
- Bankruptcy stays on your credit report for ten years, making it hard to get new credit. It could also be harder to rent an apartment, or buy or rent a car, because you will be considered a higher credit risk.
- Your credit cards will probably be cancelled if you file for bankruptcy, making it difficult or impossible to do things that require a credit card for a deposit or as a form of security.
- Bankruptcy is a matter of public record, and could make it harder to find a job in your chosen field.
Oftentimes bankruptcy and foreclosure (losing your home to the mortgage holder) go hand in hand. Whether you can hold on to your home depending on your situation, and what kind of bankruptcy you file.
Whether or not to file for bankruptcy is one of the most serious financial decisions anyone can make. A credit counselor can help you fully understand the potential advantages, disadvantages, and alternatives to declaring bankruptcy, before you decide to take action. The National Foundation for Credit Counseling can help you find a reputable credit counselor near you.