There are few things worse than struggling to pay your bills. When you are submerged with debt and cannot seem to find a way out from underneath it, life can become stressful beyond belief. In many cases, people feel like there is no hope.
When you are struggling with financial debt, you face the constant uncertainty of knowing whether you can make your payments or not and this pulls you further and further down in every possible way – financially, emotionally and even physically. You may be thinking the best solution to your problems is to file for bankruptcy. However, there are other alternatives to help you get a handle on your debt – one of which is credit counselling.
Why Choosing an Alternative to Bankruptcy Can Benefit You
When you file for bankruptcy, the effects will remain on your record for seven years and can affect your ability to get any kind of credit in the future. Before taking that step, you may want to consider some of the alternatives to bankruptcy to see if there is a better option for your situation. These options include the following:
- Credit counselling – this will also include a debt management plan
- Obtaining a debt consolidation loan
- Refinancing your vehicle
Benefits of Credit Counselling
When you choose to go through credit counselling, you will be provided with the education needed to help you avoid incurring debt that you cannot afford. The credit counsellors will work with you in establishing a budget that you can live with and an effective debt management plan that will help you get you back on your feet.
While you are working on a budget, the counsellors work with your creditors to negotiate a debt management plan that will reduce the fees, interest, and payments associated with your credit cards and other unsecured debts.
With credit counselling, your current finances are taken into consideration and a plan is developed that will allow you to continue to live while paying off your debt. These debts include:
- Student loans
- Payday loans
- Lines of credit
- Personal Loans
- Over draft
- Old utilities & cell phone bills
- Credit card debit
- Pay day loans
From there, the credit counsellor will rearrange that debt into one manageable, monthly payment.
Is Credit Counselling the Right Alternative for You?
If you are not sure whether credit counselling is the right bankruptcy alternative for you, check out a debt calculator to see how long it will take you to pay off your debts on your own. When you try and tackle your debt on your own, the majority of your monthly payment goes toward the interest on the account, leaving the balance virtually unchanged month to month. With credit counselling, interest rates on your debt can be significantly reduced, which means you can watch your debt disappear faster.
When you have become buried in debt, you may think that there are no other options other than filing for bankruptcy. If you have more than $5000 in debt, there may be other options that can help you restore your credit and help you avoid bankruptcy. Credit counselling can help you re-organize your debt, develop a manageable budget, and help you establish a debt management plan that you can live with.
The credit counsellors will help you with your financial problems and get you back to where you need to be. As you watch your debt dwindle, you can start to feel some relief as the burden from the debt is lifted off your shoulders. In no time you can start enjoying your life again without the stress of living with debt.
