When you are faced with more debt than you can manage, there are several options for getting out from under water. One option is to see a credit counselor, who may suggest you try to consolidate your debt. Many credit counselors even offer to take on this task for you, but getting you to agree they can contact your lenders to work out more manageable payments. It sounds like a good idea, to have someone do the leg work for you by calling your creditors and negotiating a more reasonable interest rate, a lower payment, or an extension of the loan terms, but the results are not always this crystal clear. In fact, many times lenders refuse to work with credit counselors and the consumer is left in a worse position than when the efforts started. And, credit counseling in this way will not get rid of your debts.
If you are looking to eliminate debt, bankruptcy is a better option. Bankruptcy will do the following:
• In a Chapter 7 case you are allowed to totally wipe out all of your unsecured debt. So, things like credit cards, signature loans, and medical bills can be completely eliminated by filing bankruptcy. Doing this will give you more money in your pocket every month, and make it easier to pay your secured debts, such as your house or car payment.
• In a Chapter 13 you do not get to eliminate your unsecured debt in its entirety, but you can reduce the amount you owe to pennies on the dollar. You can also pay only what your car is worth instead of what you owe if you file a Chapter 13.
Filing for bankruptcy used to be considered “wrong” or “disgraceful”, but the stigma that was once associated with filing a case no longer exists. Everyone from celebrities to even our newest President, Donald Trump (or one of his companies), has taken advantage of the bankruptcy laws in some form. If you need help paying your bills each pay period, give us a call to learn how filing for bankruptcy protection can help you.
For more information about credit counseling and bankruptcy, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.
