Debt is a growing problem in America. The average family carries three or more credit cards, with debt balances totaling over $10,000. This may not seem like a lot, add in the unexpected like job loss or medical bills and financial hardship is just around the corner. In fact, the majority of Tampa bankruptcy cases are caused by unforeseen circumstances that many people could not control. While filing for bankruptcy is a valuable resource for dealing with debts, it certainly isn’t the only option.
Review Your Options
Any financial expert will tell you that filing for bankruptcy should never be your first move, rather you should review all of your options to see if one might be a better fit. Unless you are on the verge of foreclosure and eviction, it is acceptable to take a little time to consider these alternatives:
Debt Negotiation — many people never consider negotiating their debts directly with their creditor. No one wants to engage in a lengthy battle with a creditor, but negotiating your debts doesn’t have to be difficult. Knowing what you can afford to pay each month and having some proof of your financial hardship can help you lower your payments, reduce your interest rate or even obtain a temporary break from payments while you weather through your tough time. One of the best things about debt negotiation is that it can be done before you miss a payment or have your credit impacted.
Debt settlement — as one of the more known options, debt settlement is often the avenue of choice for anyone who feels like they are drowning in debt. When you settle your debts, you are essentially entering into an agreement with your lender to pay less than what is owed on the account. Although many companies advertise debt settlements. be sure you aren’t agreeing to a consolidation. This usually means you will be paying one large payment a month on a loan that paid off your other debts, often a much higher interest rate. A true debt settlement can be more difficult to come by as creditors won’t often approve them until after you have defaulted on your account. However, it is never too early to ask.