When consumers find themselves overwhelmed in debt, they might start looking for ways to get a handle on their finances. If you have tried other avenues and have been unsuccessful, you may want to consider bankruptcy to get a fresh start and a better financial future.
Talking to your Creditor
Speaking with your creditors can help, making arrangements to catch up or even paying off less than you owe in one lump sum may be an option. Unfortunately, this often does not work out, either your creditor is unflexible or because you were unable to follow through on the payments. The phone calls and letters will continue until the debt is satisfied in one way or another.
Credit counseling often involves a debt management plan (DMP), up to 80% of those that sign up for DMP’s fail to make the payments. Debt management plans benefit creditors more than the consumer. Sometimes creditors will get tired of waiting while you are on a DMP and will take you to court anyways to get a judgment to enforce payment. By failing to meet the plan, you may be worse off than before.
Debt Consolidation Loans
If your debt is overwhelming and your monthly payments are more than you can afford, you may try to get a debt consolidation loan. Two basic types are unsecured, based on your credit and a promise to pay, which may come at a high-interest rate. Or a secured loan using your home as collateral, if you fail to pay this loan back, you could lose your home.
When you have exhausted other possibilities to get a handle on your debt, you may want to file bankruptcy to get financial relief. Contact a Houston bankruptcy attorney to find out what you can do to eliminate your debt and get a fresh start.