Here we present the options that are available to you.
Credit Counseling
Credit counselors are both certified and trained in the area of personal finance, consumer credit, budgeting and the management of debts.
If you feel like you no longer have control over your money or if you are just starting down the financial road and want to get started off on the right foot, then a professional credit counselor might be the answer for you.
Many also offer workshops and one-on-one seminars.
Credit counselors can help you come up with a budget that suits your life and they can advise you on how best to manage the money you earn and the debts you have. You can discuss your circumstances with them openly and honestly and they can work with you to come up with a personalized plan to help you avert future financial problems.
If you have already met with financial woes they can arrange a debt management plan whereby you make monthly payments to them and they pay your creditors for you.
Debt Consolidation
If your debt load is great and you are having a hard time paying each creditor on a regular basis then you might want to apply for a debt consolidation loan. In this way all of your debts are rolled into one and you make one payment a month instead of many.
The down side to debt consolidation is that you generally need to provide a form of collateral to qualify. Examples of this might be your home or your car. If you cannot keep up with the payments on the loan, then you must relinquish whatever you put down as collateral.
Credit Repair
Most companies that offer credit repair services cannot do anything that you cannot do for yourself. If you have been bankrupt in the past or have prior credit problems then you must do the work necessary to rebuild your credit.
You must also have patience because it takes time and effort to rebuild. You must also get into a habit of paying all of your bills on time- every month. Obtain a company of your credit report and dispute any errors you find. Apply for a secured credit card. Work to show creditors that you are making a conscious effort to improve.
Debt Settlement
If you have unsecured debt, such as money owed on a credit card(s), you can work with a debt negotiation company to come up with a debt settlement. What this is is a way in which you can pay off 10 to 50 percent of the balance that you presently owe to the creditor.
The arrangement is one that some creditors will accept whereas others may not. The downside to this is that many debt negotiation companies charge high fees. There is a fee to make the arrangement with the creditors, a monthly fee for their services and a fee paid at the end once the creditors have gotten their money.
Approach this credit option with caution and make sure you get all of the facts before you sign anything.
Bankruptcy
Bankruptcy is a legal process done at the federal level that takes place through the courts. The object of bankruptcy is to erase many of the debts a person has in order for them to improve their financial picture. It is also designed to help creditors get back all or a portion of the money that they are owed.
There is more than one type of bankruptcy that a person can file for. The two most popular types include chapter 7 and chapter 13 bankruptcies.
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