More and more consumers are finding themselves overwhelmed by their credit cards and looking to file bankruptcy. If at all costs, you can avoid bankruptcy, there are viable alternatives to bankruptcy. In fact, if a consumer files for bankruptcy, they are required by the bankruptcy court to attend a debtor education course, and many consumers can complete this online.
Typically, there are two parts to the debtor education class, one part you take prior to filing for bankruptcy, the second part you take after your filing, but must be completed prior to any debt being discharged (if filing a Chapter 7). I am going to cover the first part, as it will offer you great information on how you may be able to take charge of your finances, debt and financial future on your own, and you can take swift and immediate action with this information and advice.
The first part of this debtor education class is considered a credit counseling course. In this course, you walk through your finances in great detail, completing exercises in which you tally up your income, expenses, calculate your net worth and, of course, list your creditors including total balance and monthly payment. You end up with your debt to income ratio, which ideally should be about 15-20%. You also get a budget breakdown and tips to reduce your expenses.
This can be a very eye-opening exercise, and one that you can do very quickly yourself. The true trick to this? BE HONEST. All too many of us have an “idea” of our budget, but do you know where every single dollar that you earn goes? Only with a firm understanding of your finances can you create a budget today, with your loved ones, that might get you on the right track before it is too late. At the dinner table tonight, bring a pad of paper. The topic of the evening should be “10 Things I Will Do to Save Money”. Everyone should commit to what they can do, whether it is cutting out daily coffee runs (those add up!) to taking shorter showers (saving water is good thing, too!) and more.
Furthermore, you are asked to contemplate your financial goals. Even when one is in debt, feeling overwhelmed and completely confused, you have to be able to step back, take a deep breath and look for the light at the end of the tunnel. You should have short term, mid term and long term goals. Short term financial goals could include taking your highest interest rate credit card and paying it off first. A mid term goal could be to pay off your car. Finally, a long term goal could be to pay off your mortgage, or save for a child’s college education.
Again, this can be an exercise to do with your family, as a family unit to get everyone on the same track. It can be uncomfortable to discuss finances with your family, especially children. But the sooner that they learn how to budget and create financial goals of their own, the better off they will be once they are on their own and making critical decisions. Don’t allow your children to one day get trapped by debt. Teach them now, and give them goals to succeed.
You will receive information on all of your options on how you can best handle your debt, your finances, and your budget. Some options are easier than others, but they all have one common thread: to fix your debt situation, you will have to work really hard. It probably took you years to get into debt, it may take you years to get out of it as well. But if you have a plan that you visit every day, you stay committed to the plan, your family is partners in this plan and you make it your unwavering goal to see your option to its successful end, you will find yourself out of debt.
Handle the debt on your own: You can try to handle the debt on your own, by borrowing from friend and family to try to get your debt paid off. You can try to negotiate with your creditors on your own. Many consumers find it to be incredibly frustrating, and not always successful. However, the squeaky wheel gets the grease, and you may find that by being professional and persistent, you may get your interest rate lowered, even your monthly minimum payments lowered so you can try to stay on track.
You could try to obtain a debt consolidation settlement. Get Credit Card Debt Help. and live more with less debt. You could borrow money from friends and family, even try to negotiate on your own with all of your creditors.
Borrow against or sell your valuables and assets: You could try to obtain a debt consolidation loan, refinanceyour home, even liquidate your assets on your own. Many consumers have used sites such as Ebay or Craig’s List to sell valuable items that they may no longer even be using and applying that cash toward their debt. I have seen many garage and “estate” sales in my area, and personally know people that have done this with the purpose of paying off their debt…some, raising thousands of dollars toward that end!
Debt management plan: If you work with a debt management agency, first of all, make sure that they are a legitimate organization. All too many unscrupulous characters have crawled out from under their rocks to prey on consumers who are scared, worried, and confused. This may help you pay all of your bills off much faster than you could do on your own. Basically, you will have an agency that helps you negotiate with your creditors, knock down the interest rates, and you pay ONE payment each month, paying off your debt usually within 5 years.
Bankruptcy: Of course, the last resort is filing for personal bankruptcy, and deciding between Chapter 7 (in which your debts are discharged) or Chapter 13 (in which you work out a repayment plan). Click here if you need a Bankruptcy Lawyer as you should make this decision with the advice of a bankruptcy attorney in your area. Ask A Lawyer Online Now.
Get an Answer ASAP. 12 Lawyers Are Online! Law.JustAnswer.com.
You will also get information on your rights as a consumer, as creditors cannot harass you, nor threaten you. For example, did you know about the Fair Debt Collection Practices Act? This law prohibits your creditors from calling you before 8 am or after 9 pm. Creditors also cannot use foul language with you or threaten you in any way. If creditors are harassing you, you can end it by telling them on the phone, “Pursuant to the Fair Debt Collection Practices Act…” and end that statement telling them that they cannot treat you in the the specific ways in which they are harassing you.
Furthermore, you have the right to review one free credit report each year, as well as dispute items that are not accurate on your credit report. Use Your Rights! Repair Your Credit Today! Let LexingtonLaw.com Help! You also have the right to dispute any issues on your credit card statements directly with your creditors as well.
You will receive detailed information about credit. For example, what is the true cost of credit? If you charge something, what does it really cost you by the time that you pay it off? How can you improve your credit score? How can you reestablish your credit? Do you even know your current credit score? Get involved, as knowledge is power when it comes to your credit! Credit Crisis Concerns? Get 20% off FICO credit scores now.
At the end of this type of course, you should truly be far more knowledgeable about credit, how to deal with your debt, how to create a budget, and how to be a better, more savvy credit consumer. Many of us need credit, however, all too many of us use credit not for what we NEED, but for what we WANT.
Mail this post
A legitimate credit counseling business will provide you with ALL of your options to fix your credit, get your credit card debt under control and get your financial future back on track.
A good credit counseling organization will never “force” you into a particular option, if you feel that you are not getting all of the facts, you should continue to shop and find the right credit counselor for you and your finances. SourceOneCreditRepair.com provides customized and personal attention to your individual credit repair!
Mistakes in your credit report can cost you! Check it for accuracy – $0
Credit Crisis Concerns? Get 20% off FICO credit scores now
Some people turn to credit repair companies when they find themselves unable to solve their credit problems themselves. In fact, the credit repair industry has boomed with financial and economic crisis causing people to be in debt and face unemployment.
Read more…
Mail this post
A credit counseling business can explain further how to repair your damaged credit if you have more questions. The most important key to repairing your credit is first to know your score. You can receive an incredible offer for our readers for a 7-day FREE trial of 3 Bureau Credit Monitoring! Plus Credit Report & Score – $0 OR a Start Score Watch® Free Trial Now! You can only go about repairing your credit when you know what your creditors are saying about you, and you can then work with them to repair your credit over time.
Contact a credit counseling corporation for more information.
Repairing damaged credit is not difficult. It will, however, require a fair amount of correspondence with the credit agencies as well as your patience. Begin taking steps to remove negative and/or inaccurate information from your credit report and improve your score, thereby repairing damaged credit in no time at all.
Read more…
Mail this post
