Consumer Debt Solutions And Bankruptcy
Unfortunately, high taxes, warfare, and a soaring cost of living are not the only problems facing millions of Americans. Not so long ago, the main reason people filed bankruptcy was because of medical bills. Today, as more people lose their jobs, they are also becoming unable to pay their mortgages and credit card debts. As a result, many are trying to make bad debt settlements through consumer debt solutions groups.
Before you sign on with a consumer debt solutions counselor, you will need to make sure that you still have control over bankruptcy related proceedings. Unfortunately, there are some groups that will try to make you believe that it is right to allow them to buy, or consolidate all of your debt. In many cases, you will find this will create an enormous amount of trouble for you if you cannot meet your monthly payments.
Consider a situation where you have $20,000 in unsecured credit card debt, a car loan with $9,000 remaining, and a mortgage for $50,000. Chances are, all of your credit cards are with different banks, even though they may all ultimately go back to Visa, Mastercard, Amex, or Discover. Now, let's suppose you lose your job, get divorced, or suddenly lose your income for some reason.
If you don't allow consumer debt solutions companies buy out your debt, each of your creditors will have to deal with you individually. As may be expected, each of your lenders will have different collections policies and timelines for specific actions. Therefore, you may be able to settle one debt at a time. Without a question, it is a stressful process, but it can be done.
As you may be aware, your creditors can force you into bankruptcy. That said, an individual lender cannot do this unless you owe them more than $10,000. Typically, you will find that individual unsecured debt creditors will be less willing to join together to force you into bankruptcy. Among other things, they will be afraid the judge will award you a complete relief from all your debts.
At the same time, once you start focusing on individual accounts, it is likely that you will be able to settle all of your debts amicably. On the other hand, when you consolidate your debts, you will be creating an aggregate debt that is well over $10,000. Chances are, if you have a home, they will force you into rolling your unsecured debt into a first or second mortgage, which makes you a prime candidate for foreclosure.
If you read carefully, you will notice most “debt consolidation programs” will not take applicants with less than $25,000 worth of debt. This means your new “lender” can force you into bankruptcy, or move faster to put a lien on future and current wages. It will also be easier for them to force you to go to court outside of your local area in order to achieve these goals.
Unfortunately, getting into a debt snowball can happen faster than you realize. Without a question, you should seek debt counseling in case you need to use bankruptcy as a debt solution. As may be expected, you will need to carefully assess each consumer debt solutions program, and give serious thought to the steps they want to take. |