Are you feeling overwhelmed with overdue bills? You might have made a few bad financial decisions in the past, but most people who file for personal bankruptcy take that route due to unexpected expenses like high medical bills. However, bankruptcy means a serious hit to your finances that can linger for up to seven years and that can affect your ability to pursue future credit options. Before you pursue that route, you should consider counselling that can actually help you save money every month.
The basic theory behind how financial counselling works is that instead of paying half a dozen creditors every month, you only make payments to one. That can cut out things like the car payments, charge cards, even that unpaid medical bill. In many cases, you may even be able to settle what you owe to make it easier to pay off simply because you would owe less.
It’s also less of a hit to your credit than bankruptcy would be. When your future plans include buying a house and maybe trading in your car for a new one, you don’t want anything in your credit report that would represent bad news like higher interest rates and possible rejection for a loan. If you’ve already taken that kind of hit to your credit score or you’re falling behind on your monthly payments, you might have considered going to those fast advance places, but that is an especially bad idea because they’re designed to drag you farther into your already existing financial hole.
You’d be better off going to those peer to peer lending sites that might offer you a better interest rate than your charge cards do. Those sites are frequently used by people who have gotten into situations similar to yours and they’re looking for a way to get out of their money mess. If there’s a downside to those sites, it’s that individual lenders might not be willing to take a chance on you and can be nearly as unforgiving as credit collectors if you are late on a payment.
There might be times when your finances just spiraled out of control. This doesn’t make you a bad person. It just means you were unlucky and the point of counselling is to give you a second chance to get things back on track. That way, you don’t feel like your entire life is going down the tubes simply because of unexpected expenses or a few poor decisions.