Many people are looking to avoid bankruptcy, which can tarnish your credit and limit your ability to find financial happiness. For instance, with it on your credit report, you will have a hard time buying a home or car, or even renting an apartment. Thankfully, there are multiple ways that you can prevent having to file bankruptcy and can finally overcome your debt woes.
Debt Settlement and Consolidation
Obtaining a debt settlement or consolidation can be done yourself or with the help of a credit counseling company. If you want to do it on your own and save money, you can begin contacting your creditors to negotiate a payment plan or a lump sum settlement amount. When you begin falling too far behind on your payments, these options will help you steer away from bankruptcy. In fact, asking your creditors for such options will encourage them to negotiate with you, because receiving at least something via one of these avenues is a lot better for the creditors than receiving nothing in the event that you file for bankruptcy.
With debt consolidation, you may need a third-party company that can set up this plan for you. Consolidation is when all of your debts are combined together into one sum that you pay off monthly. You can also get a home equity loan that can be used to pay off all of the debts you owe; this way you’re only responsible for one debt and one monthly payment.
Better Money Management
In order to take care of your debt, you will need to learn some valuable debt prevention tools. With better money management skills, you will be able to avoid falling deeper into debt, and once you have paid off the money you owe, you will be able to keep from going back down that path.
You can work with a debt counselor to help you come up with a budget. A credit counselor will teach you to better manage your money as well. You can also have money automatically taken from your paychecks to go towards your debts, so that they are paid for even when you forget about them.
Take Advantage of the Options Available to You
Professional help isn’t always needed when dealing with debt. If you feel that you can set up payment plans or manage your money in a way that will allow you to afford all of your bills and catch you up, then go for it. Otherwise, you can seek assistance. The available options can be pursued on your own or with the help of financial pros. Either way, if you’re saddled with serious debt then it’s important that you begin the process of taking care of it as soon as possible, so that you can avoid digging yourself into a debt hole so deep that you’ll have to file for bankruptcy.