It is a tough economy. Maybe the toughest in 80 years. It's not unusual for people to have financial Problems.
Enterprises have money issues too. Infrequently they need to cut back on costs. That means folks lose their jobs. And it could be awhile before those jobs come back.
Then there’s the property disintegration. Homes are not worth what they were when they were acquired. That suggests many people are “underwater” and have loans that are larger then their homes are worth.
And infrequently you don't have to lose your job or be underwater to have financial Problems. Perhaps you earn a living on commission like a salesman does. Or you are reliant on your annual bonus check.
With a horrible economy, folks don't buy as much, business is much slower, and those commissions and bonuses are going to be smaller. And if you are still living on what you use to make, then something’s got to give. It generally means that the loan for that new automobile, or the new pool you bought during the boom times… Well the cash coming in isn't really enough to cover the cash that has to go out.
It all adds up to a financial mess for both you and your family.
So what are you able to do?
Of course you need to cut back and live within your means. That's a certainty.
But what if that's not enough.
You have a few options.
Loan Modification
A fantastic place to begin is to try to get your loan altered. Lenders don’t want to have to put a loan in default. It looks bad on their books. Plenty will consider a loan restructuring if you simply approach them.
And believe it to be true or not, they do not want to foreclose on a home either. They do not want to be in the real estate business and have a home to sell in a tricky home market. Many will be very happy to consider loan modifications or short sales.
What About Bankruptcy
Even though it should not be your first option, bankruptcy can actually be something you should consider. Yes it'll take a bit to get your credit rating back to good standing (typically about 5 years) but it is still preferable to having it messed up altogether.
And what about the stress.
Having to deal with sustained hounding from creditors can take it’s toll. The strain can spoil your day, not to mention a family’s confidence. And the toll on a wedding is something that is actually blindingly obvious.
Advantages of Bankruptcy
Believe it or disbelieve it, bankruptcy has numerous benefits. Here’s the top 3…
1. It can get those bill collectors off your back. Your bills essentially go away.
2. Creditors must stop disturbing you. It’s basically the law.
3. You get a fresh start. You can start to live within your limits again.
Other less clear benefits include:
- You'll feel better. The majority of the stress will be gone.
- It's easy to get your credit history back to a place that you can live with.
- Your house life can get back to normal. Maybe a wedding can be saved. At least the atmosphere in the home will be more relaxed.
So consider bankruptcy as a positive option if you're facing harsh financial difficulties. You can probably want to talk with a bankruptcy lawyer. They will help you choose the very best of many bankruptcy options available to you.
But don't wait. You have nothing to lose but a large load off your back.
Rick Hart is an online business consultant. He provides tools for bankruptcy barristers in Tampa that help with bankruptcy, debt consolidation and foreclosures.