Life can throw you several challenges, one of which is dealing with finances. Luckily, you have a couple of ways to handle this issue if you take the time to plan and evaluate your situation. Once you have significant information, you can then decide on the best course of action for dealing with your financial problems.
Credit Counseling
Credit counseling is a good option for evaluating your financial situation. To begin, a credit counselor looks over your finances and then helps you create a workable budget. Generally, the counselor will need your income amounts, debt totals and banking account totals to determine how much money is coming in and what bills you can reasonably pay.
Once the counselor looks through all of the numbers, he or she can then help you decide on a course of action. In some situations, a budget that takes into account your debts and the amount you need for a food and living arrangements is a good way to deal with your financial issues.
This process helps you plan each payment to your creditors so you do not have to worry about making late payments. Over time, you may be able to correct the issues with your finances and pay down your overall debt.
Bankruptcy
When your debt is extremely high and your income is low, you should look into your bankruptcy options. Bankruptcy allows you to minimize most of your debt so you can regain control of your financial situation.
Chapter 7, for example, allows you to erase the amount you owe to specific companies. Usually, you can erase the debt for credit cards, medical bills, mortgages and car loans. The courts discharge the amount you owe, which means these creditors can no longer require you to pay them any money.
When your income is slightly higher, you best bankruptcy option is a Chapter 13, which allows you to create a repayment plan. In many cases, the courts can lower the overall amount you owe to reduce the monthly payment amounts. The idea is to pay back as much of the debt as you can, while still leaving you enough money each month to pay for your living expenses.
It is important to note that neither form of bankruptcy will allow you to get rid of specific debts. These debts generally include student loans, alimony or child support payments you owe.
After gathering information, it is best to consider each method before making a decision. Once you have taken some time to weigh the pros and cons of each option, you can choose the best way to handle your financial issues. For more information, contact a bankruptcy attorney such as Fithian William C III.
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