subject: Eliminating Unsecured Debt - Credit Counseling, Debt Settlement Or Filing for Bankruptcy? [print this page] What Do I Do First? What Do I Do First?
The first thing you need to do is to start getting your house in order. To make the best decisions you need to be able to who you owe, how much you owe and what they are demanding at this time. Do not avoid phone calls. If you answer the phone, and speak to your credit card representative, believe me they will help and they will stop calling over and over again...Please Please Please stop spending money...the most important step in this is to stop spending
Sit down and take out all of those bills and statement and legal papers and start to sort them out by which debtor they belong to. Start to list them out. Break them into categories. Start with Housing Costs, like your mortgage, your taxes, your electric bill and other utilities, you know the stuff you have to pay and have to have. List them out one by one, who you owe, how much you owe, how many months you are behind. Next list out the recurring bills, like cable, cell phone, internet, you know the stuff. And while you are doing this. This list will take you a while, perhaps a few days. In the meantime keep answering your phone. Ask each called to give you two weeks to get things put together so you can have a comprehensive plan. Do not lie to them.
What Comes Next?
Once you have everything together, you need to make some decisions. Don't get caught up or frustrated. You need to do this yourself. Spend a little time on the internet doing research and learning the different ways to deal with debt. Believe me a little research will payoff greatly.
Now comes the tricky part. There are several ways to handle your debt.
These are:
Debt Consolidation - All of your debts are consolidated into one large debt and you make a monthly payment to reduce the debt.
Debt Settlement - You or your representative contacts the credit companies and comes up with an acceptable settlement. In most cases this is in one payment. This is slightly different from debt negotiation.
Debt Negotiation - You or our representative comes up with a plan and some money and you then negotiate your debt, reducing the debt, stopping interest and agreeing to a payment schedule that is usually supervised by the negotiation agent. In most cases you also make an immediate payment to reduce the debt and show good faith
Credit Counseling is done by an approved non-profit counseling agency. These business's offers you credit counseling and teach you how to stay out of debt and at the same time negotiate a reasonable settlement and payment schedule on your behalf. Your payments are usually made through the agency who then disburses them to the creditors as agreed. There is a formula based on income and debt.
And finally the big one: Bankruptcy
Bankruptcy is involved and complicated and the laws have changed many times in the past few years. Forget all the things you heard about bankruptcy over the years. It can be fast and effective, if you fit the right criteria. There are a lot of Bankruptcy attorneys handling these personal cases. You need to consult one of them.
Remember, a little time reading and researching can pay off big time in the end. You need to learn about these and determine which is the best solution for you. You need to learn the pitfalls of each and the costs of each and the effect each has on your credit reports and your future.
Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement. Check out the following link to locate legitimate debt help in your state.
Eliminating Unsecured Debt - Credit Counseling, Debt Settlement Or Filing for Bankruptcy?
