Ways to Deal with Multiple Debts
Do you have too many debts up your sleeves, but no tricks to use so you can deal with them once and for all? You’re probably thinking about applying for a debt consolidation, where you only need to deal with one debt and make a single repayment. This isn’t the only option you have, however. Considering that debt consolidation has its share of risks, you might want to look into other alternatives.
As the name suggests, this process involves negotiating with creditors for a lower monthly payment or payback amount. Getting creditors to agree, however, is no walk in the park. Money lending is a business, after all, and no creditor would want to be on the losing end. But some of them might understand your financial hardship, which led to you being unable to make repayments.
Debt Management Plan
This involves enlisting the help of credit counselors to develop and maintain a debt management plan that is suitable to your case. Along with a financial counselor, lower fees and payments will be negotiated with your creditors. Once approved, you’ll be required to deposit money into a particular account, and a debt management organization will make the payment on your behalf. A debt management plan requires diligence. Failure to make a payment on time even once could nullify the plan.
Bankruptcy should be the very last of any last resort, as it will have a negative impact on your credit standing. It is also applicable only on certain situations. Student loans and alimony, for example, can’t be discharged through a bankruptcy. So make sure you consult with financial experts before you file for a bankruptcy.
There are more ways than one to deal with multiple debts. Whichever option you take, always seek financial advice to help you weigh the pros and cons of every move you make.