Many Americans are struggling with debt; the average amount of consumer debt per adult in this country is around $47,000. About nine percent of consumer debt is delinquent, either with late payments or no payments at all. Sometimes it's not enough to just buckle down and pay extra on debt; many Americans don't have the luxury of having extra room in the budget to do so, especially those who are already behind on payments. If you feel overwhelmed with debt, you have three main options. Each situation is different, so it's important to choose the solution that works best for you.
Debt Relief Provider
You can hire a debt relief provider to negotiate payment arrangements and settlements with your creditors. You may also choose to hire a debt management company that will help you work out a budget and then manage your payments for you each month. These organizations charge a fee, and many people seeking relief may not have the extra cash to pay the fee or a settlement to a creditor. In addition, these services may put an entry on your credit report that could further damage your credit.
DIY Debt Relief
You can do the same thing a debt relief provider can do. There are several websites that offer advice on how to contact creditors and renegotiate repayment terms or request a settlement of a lower amount than what is owed. You can also attempt to have interest rates lowered or try to consolidate several smaller bills into a larger loan or credit card. The trade-off with doing it yourself is that it takes time and effort, but it can save you quite a bit of cash and no further hits to your credit report.
Bankruptcy
A bankruptcy filing may not be what you want to do, but sometimes it is the best option, especially if you are completely overwhelmed with debt, can't make your monthly payments and are struggling to live. It does cost money to petition for bankruptcy; you will be responsible for attorney fees and filing fees, though many bankruptcy attorneys lump these fees into one easy price tag. There are two basic types of bankruptcy for the regular consumer: Chapter 7 and Chapter 13. With Chapter 13, you are allowed to reaffirm some debts, such as your mortgage and car loan, so you can keep these tangible assets and continue to make payments. With Chapter 7, all assets are sold to cover your debt, the remaining debt is wiped out and you start over with a clean slate. Both of these options are very stressful and can impact your credit, but if you are struggling with your amount of debt, bankruptcy can be a blessing to you and your family and help you start fresh. Talk to a lawyer, such as Dennis Lee Burman Attorney at Law, for more information.
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