The Final Installment: What Are My Options?
Clients often seem more panicked when a collector threatens to ruin their credit. My 15 years of experience has taught me that it is mostly creditors that bother with reporting you to the credit bureau. By the time you are threatened about ruining your credit by a collector, you have probably already been reported. Therefore, it is important to not let this threat make you change your list of priorities. Stick to the plan. There are other ways to fix your credit.
Any debt you have cosigned on should be thought of the same as your other debts. If it is tied to your home or your car, it should be treated with high priority like your mortgage and car payment. If it is unsecured, it can be stuck in the list of low priority debts.
As I wrap up this final installment, I want to discuss your options. When you are in this amount of debt, a choice needs to be made.
If you are thinking of loan modification, it is important to remember that it should only be an option if your current financial situation is temporary. Remember, there is no such thing as a free lunch. If the lender is going to offer you lower interest rates and an extended term, they are expecting you to be better prepared in the future. If you aren’t getting a raise next week, this may not be the option for you.
Debt settlement is also thought of as an option. Unbeknownst to most, debt settlement is only an option if your debt has been passed from the original creditor to, say, a collection agency. In short, you have to wait until you are receiving the harassing phone calls to think about debt settlement. These agencies also charge hefty fees, possibly monthly, and often don’t act until you are prepared to pay the full amount. This is also a part of the industry particularly prone to scams.
Your next option is bankruptcy. While the “b” word remains taboo for some, bankruptcy is designed for people in these situations. Essentially, it is protection built into the legal system for people that get over their heads in debt. Bankruptcy is also immediate. After an initial appointment, you can stop the harassing calls, get your car back, and save your home.
Want to know more about your options? Order a free copy of my book, “Get Out of Debt: Secrets your creditors don’t want you to know.” With this consumer guide, you can understand your debt and explore the right option for you.
Tags: bankruptcy, car payment, credit bureau, credit score, debt collector, debt settlement, Get Out of Debt, high priority, loan cosigner, loan modification, low priority, mortgage payment