Tips to Get Out of Debt and Avoid Bankruptcy
Issue date: 5/3/09 Section: FYI
|
For many American households, extraneous spending and poor money management combined with an unforeseen event, such as a job layoff, a health crisis, divorce or a death in the family, has resulted in the perfect cocktail for financial disaster. In fact, a recent survey by FindLaw.com, the world's leading online source for free legal information, 10 percent of Americans have considered filing for personal bankruptcy at some point in their lives.
There are several danger signs that you're headed for financial trouble. One of the most worrisome is living paycheck to paycheck. If you are, you're not alone. According to a 2008 survey by the American Payroll Association, 71 percent of American workers are living paycheck to paycheck.Other danger signs include:
1. Making only minimum monthly payments on your credit cards
2. Using a series of consolidation loans or home equity loans to pay overdue bills
3. Taking out cash advances to pay other bills
4. Incurring a growing number of late fees due to late bill payments
To help you get out of debt and avoid bankruptcy, here are eight tips from FindLaw.com:
Get Help Now.
You'll need willpower and a lot of support from those around you to get out of debt. For many people, having someone who can hold you accountable, as well as someone with whom you can celebrate the little victories, is essential to reaching your goal of becoming debt free. For expert help, seek the assistance of a debt management or credit counselor, which are available through many social service agencies. Try visiting the United Way at www.liveunited.org or call (888) 995-HOPE for a toll-free foreclosure prevention hotline sponsored by NeighborWorks America and the Homeownership Preservation Foundation. If you're facing foreclosure or are wondering about declaring bankruptcy, immediately seek the counsel of an attorney specializing in debt management and bankruptcy.
Pick Up the Phone.
Don't wait for your creditors to call you. Call them to negotiate a new payment plan that you can realistically handle. Some creditors might be willing to settle their claim with you for a smaller cash payment, or they might be willing to stretch out the term of the loan and reduce the size of the payment.
Budget Time -- Back to Basics.
Be the first to comment on this story