If you’re stressed out because of your finances, you’re not alone. It’s hard to know how you’re going to move forward when you are working fewer hours than you planned or get laid off for months on end.
The good news is that there are many different options for getting out of debt or getting yourself into a better financial position. Some possible options for handling your debts include:
- Going through credit counseling and debt management programs: This may involve negotiating with credit card companies and creditors to ask them to lower interest rates on your debt. This should help reduce how much you’ll pay each month. The goal is to not only reduce your payments but also to consolidate them into a single monthly payment that you can afford.
- Debt settlement or negotiation that helps you lower the principal balance owed: The trouble with this is that it does require you stop paying, in most cases, so that creditors have a reason to “make a deal” with you. If you can still afford payments, then this isn’t necessarily the best choice, since it will negatively impact your credit.
- Chapter 7 or 13 bankruptcy, which help reduce or eliminate your debts: With Chapter 7 liquidation, you may have to give up some assets, but you could also walk away from the bankruptcy without any unsecured debts, so long as those debts qualify. With Chapter 13, your debts are reorganized, and you make payments for three to five years on the balance. After that, qualified debts are discharged.
These are three options to eliminate debt that you may want to consider. An experienced attorney can talk to you about these and other options.