If you are struggling to pay your bills and are finding you are getting yourself deeper and deeper in debt, filing for bankruptcy may be an action you are considering. It is important to take steps before taking this route as a last-ditch attempt to get a handle on your finances if possible. Here are some tips you can use to determine whether bankruptcy is truly the best solution to your monetary troubles.
Call All Creditors to Try Negotiating
Some creditors allow you to reduce the amounts of your monthly payments in exchange for a longer duration for a payoff. Medical bills are usually negotiable in this manner. Before you file a bankruptcy claim, give each of your creditors a call to inform them how much you are able to pay each month. Many will work with you, as they will want to receive any type of payment rather than none at all.
Consider Moving Debt to Another Creditor
If you have more than one credit card, and you are offered the opportunity to use a balance-transfer feature on one of them, consider using this benefit to pay off a credit card with a higher interest rate. Some credit-card companies will offer lower interest rates as a promotion to get you to move money from a competitor's company to theirs. This may give you time to catch up on other bills while the reduced interest rate is applied.
It is important to try to pay off as much of the amount you move as possible within the time limit of the reduced pricing system, as the interest rate will be raised at the end of the promotional period. Refrain from using the credit card at all as you try to catch up with debt, as any new purchases will accumulate interest and as payments will be applied to this amount first before money is applied toward the transferred amount.
File Hardship Forms with Your Creditors
Some companies, such as medical facilities, electrical companies, or private doctors, offer reduced rates for customers who do not make enough money to pay their bills in full. Ask creditors whether they have a financial-hardship program in place and have them mail you the necessary forms to fill out to apply if applicable. You will need to send in photocopies of your financial information, including bank statements and any other bills you currently owe. Each company will use this information to determine whether you qualify for a reduced amount.
Talk to an attorney such as Donald T Tesch, PS to learn more.
Share20 January 2017
