Millions of American consumers have filed for bankruptcy in the past several years as a result of overwhelming debt. It may seem like the best option when you are faced with financial turmoil that you feel you can't get out of but it is really important to consider how this course of action will affect your finances in the future as well as your ability to make large purchases, like buying a home or automobile, in the future.
Claiming bankruptcy will affect your FICO score and without a good credit score, you will pay higher interest on loans and credit cards. The amount you end up paying on a home because you were given a higher interest rate due to a post-bankruptcy credit score, could turn out to be a lot more than what you will have written off with a BK. You can't get rid of your debt altogether, either, since students loans, auto title loans, and payday loans cannot be written off.
Take a look at your alternatives to claiming BK and getting rid of your credit card debt. Consult with a credible credit counseling agency that will assess your particular financial scenario and decide if you are a good candidate for a debt repayment plan. If they feel you can pay off what you owe within 5 years, they will put you on a repayment schedule by working with your creditors to get your interest rates and balances lowered. You will make a lump sum payment to the agency every month and in turn they will pay your creditors. While you will most likely be charged a fee for this service, you shouldn't pay more than $25 per month. Watch out for companies that aren't legit and try to charge you upfront.
A good credit counselor can recommend budgeting classes and programs that will help you get back on track with your finances and avoid finding yourself in the same place again with credit card debt. If you are not a good candidate for this type of program, take matters into your own hands and call your creditors to see if they will cut your interest rates and put you on a payment program. They won't receive anything should you claim BK so they are most likely going to be willing to work with you.
Once you have made an agreement on how much you will pay each month and when you will have your balance(s) paid off, ask the creditor to send you a copy of the agreement in writing and stick to the arrangement by making your payments on time and for the amount agreed upon. You may not get another chance to make good on your debt this way!
Laura is a school counselor and blogger. Her own personal financial experiences as well as a deep interest in psychology have encouraged her to delve deeper into the subject of money and emotions. She has her Masters in Counseling and writes for various financial websites such http://www.approvedmoneycenter.com You can also find her on Twitter @laurasnoox.
Article Source: http://EzineArticles.com/?expert=Laura_J_Solomon
Article Source: http://EzineArticles.com/8451568
Claiming bankruptcy will affect your FICO score and without a good credit score, you will pay higher interest on loans and credit cards. The amount you end up paying on a home because you were given a higher interest rate due to a post-bankruptcy credit score, could turn out to be a lot more than what you will have written off with a BK. You can't get rid of your debt altogether, either, since students loans, auto title loans, and payday loans cannot be written off.
Take a look at your alternatives to claiming BK and getting rid of your credit card debt. Consult with a credible credit counseling agency that will assess your particular financial scenario and decide if you are a good candidate for a debt repayment plan. If they feel you can pay off what you owe within 5 years, they will put you on a repayment schedule by working with your creditors to get your interest rates and balances lowered. You will make a lump sum payment to the agency every month and in turn they will pay your creditors. While you will most likely be charged a fee for this service, you shouldn't pay more than $25 per month. Watch out for companies that aren't legit and try to charge you upfront.
A good credit counselor can recommend budgeting classes and programs that will help you get back on track with your finances and avoid finding yourself in the same place again with credit card debt. If you are not a good candidate for this type of program, take matters into your own hands and call your creditors to see if they will cut your interest rates and put you on a payment program. They won't receive anything should you claim BK so they are most likely going to be willing to work with you.
Once you have made an agreement on how much you will pay each month and when you will have your balance(s) paid off, ask the creditor to send you a copy of the agreement in writing and stick to the arrangement by making your payments on time and for the amount agreed upon. You may not get another chance to make good on your debt this way!
Laura is a school counselor and blogger. Her own personal financial experiences as well as a deep interest in psychology have encouraged her to delve deeper into the subject of money and emotions. She has her Masters in Counseling and writes for various financial websites such http://www.approvedmoneycenter.com You can also find her on Twitter @laurasnoox.
Article Source: http://EzineArticles.com/?expert=Laura_J_Solomon
Article Source: http://EzineArticles.com/8451568
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