SOS – Debt Management Help Needed
The consequences of incurring a ton of debt can be as overwhelming as being deluged by a tidal wave. Some debtors are at a loss on how to surmount this financial hurdle. Seeking debt management help and advice may be the only way many consumers enmeshed in a debt trap know. Some debt management companies push for debt consolidation or debt management plans that work to the creditors’, rather than their clients’, advantage. Debtors must realize that there are actually a number of other options, besides debt consolidation, that may be considered to get on top of financial obligations.
Before Seeking Debt Management Help
Before you sign up for debt management help from credit counselors, consider negotiating with creditors yourself first. The lines of credit card companies are often open for debtors who call and ask for a decrease in interest rates and monthly payments or waive certain fees provided that you continue to pay regularly. Just make sure you understand your finances, know how much monthly payment you can afford to continue regular payments and be ready to bargain with them.
You Do Not Always Need To Get Debt Management Help
If your negotiation with your creditors proved unfruitful, you have another alternative besides going to credit counselors to seek debt management help. This is by obtaining a traditional loan, either secured or unsecured. If you have a job and your credit rating is still somehow satisfactory, you may still qualify for an unsecured personal loan. Use the loan amount to settle some of your debts, prioritizing those with higher interest rates since their balances are more likely to spiral.
If an unsecured debt may no longer be an option, but you have a home with good equity, you may use it as collateral to obtain a secured loan, specifically a home equity loan. Use this amount to pay off your higher-interest debts.
Get Debt Management Help
If the alternatives previously mentioned do not work for you, you may need to seek debt management help. After discussing with debt management companies your financial situation, they will recommend you a plan of action to help you systematically eliminate debt overtime. Often, they will advise you to follow a debt management program. You will pay them for negotiating more lower interest rates and more affordable payment schedule with your creditors on your behalf, sometimes counseling you on money and credit management and distributing payments to creditors. A debt consolidation may be recommended but it is advisable for you to work out other options before taking this recourse. If obtaining a debt consolidation loan is recommended, make sure that the interest rate of this loan is not more than the interest rates which you can secure from traditional lenders.
No Way Out But Bankruptcy
Although this is often considered a last recourse, some financial situations of individuals would benefit more by declaring a bankruptcy than by obtaining a debt consolidation. These are cases where consolidation could do nothing about but delay an unavoidable bankruptcy. Why prolong the agony when you can move directly to bankruptcy?