Life always seems to throw curveballs. It only takes one unexpected major expense or a series of financial decisions that had unforeseen consequences for you to find yourself in a situation where you are drowning in debt.
Soon, the debt collectors start calling, which can be incredibly stressful. However, there are steps you can take to stop these harassing phone calls and address your debts in a manner that is affordable and gives you the opportunity to pay back what you owe.
Two possible debt relief options
If you have a major bill with a creditor, it is likely that just as much as you want the debt cleared, the creditor simply wants to be paid. If so, you may be able to negotiate a settlement with your creditor. You can work with your creditor to come up with an acceptable payment plan that gives you time to pay what you owe in installments. Creditors may also be willing to accept a lump sum payment that is less than what you owe.
You can also look into working with a credit counselor if you have unmanageable debt. The credit counselor can work with you to create a budget so you can manage your money and your debt. They may also have financial workshops you can attend at no cost.
Make sure you do not choose a credit counselor who will ask for a high fee for their services or that strongly encourages you to contribute financially to their organization.
Filing for bankruptcy is always an option
Finally, you can always consider filing for bankruptcy. If you choose Chapter 7 bankruptcy, your non-exempt assets will be collected and used to pay what you owe. Once these assets are depleted, many of your remaining debts will be wiped out. If you choose Chapter 13 bankruptcy, you will follow a repayment schedule where you make periodic payments for three to five years. After this time is up, many of your remaining debts will be wiped out.
Even though filing for bankruptcy will cause a hit to your credit, it is still a responsible way to address debts you simply cannot afford. Filing for bankruptcy does not mean you are a failure. It is a proactive way to address your debt in a manner that ultimately leaves you in a stronger financial position moving forward.