Debt elimination without
bankruptcy should be attempted before throwing in the towel and filing bankruptcy.
Bankruptcy is
a legally declared inability or impairment of ability of an
individual or organizations to pay their creditors. Creditors
may file a bankruptcy petition against a debtor ("involuntary
bankruptcy") in an effort to recoup a portion of what
they are owed. In the majority of cases, however, bankruptcy
is initiated by the debtor (a "voluntary bankruptcy" that
is filed by the bankrupt individual or organization).
First and foremost, one needs to put into action a debt
management plan.
A debt management plan may help, but do your
research and consider all your options first. If your finances
take a turn for the worse and you find yourself drowning in debt,
a debt management program may help you keep
your head above water.
Debt management programs (sometimes called debt management
plans) may be able to help you negotiate lower interest
rates, get late fees waived, work out a payment schedule that's
acceptable to you and to your creditors, and consolidate your
monthly payments into one.
Keep in mind, however, that there
are a lot of debt management programs that are unreliable or
that charge exorbitant fees, and there are some that are just
plain fraudulent. Also,keep in mind that the purpose of an
agency debt management program is to get you out of
debt and avoid bankruptcy.
If your credit isn't damaged, it probably will be by utilizing
a reputable consumer credit counseling agency. Because their
job is to help you live while paying off your creditors and acting
on your behalf. Once you enter into the agreement with an agency,
let them handle the collectors.
RESOURCES: Debt Elimination Without Bankruptcy
FTC Bureau
of Consumer Protection - Consumer Information: Credit & Loans
Credit Report
and Score Information from Experian.com
TransUnion
- Check Your Credit Report and Credit Score Online, Instantly
and Securely
Equifax
Products: Credit Reports, Credit Scores & Identity Theft
Protection
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Personal Finance
Money Tip: For most people, lack of self control is the
reason for accumulating debt.
Purchasing things that we don't need or can't
afford is the primary cause of unmanageable credit card
debt. |
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