Are you delinquent on your credit cards? Recent statistics show that over 4% of all credit card payments are behind, so you’re not alone. With personal bankruptcy filings increasing each year, despite the new bankruptcy laws, the credit card epidemic is spreading rapidly. Fortunately, with delinquencies soaring more debt help options have come available to the aid of past due consumers.
Of the credit & debt consolidation options available for consumers, the only alternatives available to bring your accounts current are loans and credit counseling. Unfortunately, “Robbing Peter to Pay Paul” can make your situation much worse and is not an advisable tactic for debt reduction. Since you will oftentimes be asked to consolidate your debt with equity from your home or other property, the risk is high because as little as one missed payment can lead to your home’s foreclosure. Given the fact that you’re clearly overextended since you have fallen behind on your unsecured debt, this is probably not a risk worth pursuing. Also, if you qualify for a debt consolidation loan that is unsecured, there’s a good chance that you won’t be eligible for a loan with decent interest rates because of your recent late payments . Therefore, your payments will either be very high and difficult to afford, or you will have a low monthly payment and getting out of debt will be nearly impossible.
This being the case, credit counseling may be a better way to catch up on your late accounts. Another debt management service available to consumers who are overdue on their credit card payments is debt settlement, also known as debt negotiation or reduction. Debt settlement is not able to bring your payments current, but through negotiating with creditors, you can settle your debt for less than the full balance. Depending on your individual circumstances, negotiations can potentially save you as much as 40 to 60 percent off your credit card balances. Late fees and interest do accrue until settlements are reached. However, it is generally the fastest way to get out of debt without filing personal bankruptcy.
Filing Personal Bankruptcy
Far too many people who are late on payments to their credit card accounts panic and file consumer bankruptcy to solve their debt problems. Although the resolution is immediate, the impact, consequences and effects are long lasting. For one, Chapter 7 Bankruptcy will stay on your credit for up to 10 years, and it is generally regarded as the worst mark someone can possibly have on their credit report. When you factor in that is stays on legal records for as much as 20 years and more employers are asking consumers “Have you ever declared bankruptcy?” on job applications, it only makes sense as a last resort for dealing with debts that are behind.
Behind On Bills & Loans Questions
I fell behind on my credit card bills and the accounts are now all being handled by debt collection agencies. One collector in particular has been very persistent with me and threatening to sue me in court to get the full balance. Can they even do this?
This is a common scenario with past due accounts. Although your creditors are always reserved the legal right to file a lawsuit against you, this happens far less than it is actually threatened. On the same token, however, it is technically illegal for a creditor to threaten legal action if they do not intend to do so. A lot of confusion about issues with creditors threatening a lawsuit stems from the way they intentionally use the language to be as vague as possible. A lot of times you will hear a collector say “Before any further action is taken.” You may construe this as they’re intending to sue you over the debt, but they may in fact be referring to the account moving to another third party credit & debt collection agency or “charging off” the debt. Of course they want you to think it’s a bigger deal than it actually is, which is why they make a point to not clearly state what their real intention is.
I missed one payment on my car loan. Can they repossess the vehicle?
Technically, yes. Depending on your contract with the finance company, it is possible for them to seize the property even if you don’t miss a payment. They do this if they feel your financial state has worsened to the point where delinquent payments are inevitable, or if you have seriously damaged the condition of the property that is collateral for the loan they gave you.
Despite this, repossessions can normally be avoided if you manage to catch up the payment or work out an arrangement with the bank. The first step you should take at this point is to contact the lender to see what can be worked out.
I am behind on my payments and would like help paying everything off, but I don’t even know where to start. What do you suggest?
You should fill out a form to get free debt advice from a professional debt management company . They will go through what your options are, explain how they can potentially help, and see if you are a good fit for their program. You can start today!