By Jason Rodriguez
We know the pressure can be overwhelming many times when you are facing an enormous debt load and don't know what to do about it. There are solutions that provide debt relief, but you have to evaluate options carefully because everyone's circumstances are different. It's important to avoid bad information, so here we present three common myths about debt relief solutions.
- Myth number one: You absolutely must pay every penny of your debt
- We're not advocating that you abandon your responsibility just because you don't feel like paying your credit card bills or other financial obligations. Likewise, you would never encourage people to enter into an agreement when you know you will never be able to pay off the debt. This is irresponsible and borders on fraud.
However, many honest folks work hard to pay off their bills but end up taking on a little more than they can handle. In these situations, the consumer may simply not be able to meet his obligations fully. If credit card companies know your situation, they may arrange a settlement wherein you pay only a fraction of the original amount. This may not be good for your credit, but if your financial situation is bad enough your credit is not foremost on your mind. - Myth number two: If you damage your credit, you'll never be able to fix it
- Bad credit does have some long-term ramifications, and you may have trouble qualifying for loans if you haven't been paying your bills. If you're looking for a car loan, mortgage, or any other kind of credit, you may be forced to pay higher interest rates or even be denied completely because of your poor credit history.
However, you can repair your credit over time, even though this requires some patience and discipline. If you have a poor credit score, this probably means that you have not been able to pay your bills because you are charging too much to begin with. Look at this as a learning experience and develop a better budget for the future. - Myth number three: Bankruptcy should only be the very last resort.
- Bankruptcy should never be taken lightly, because it will affect your ability to get credit for some years to come. However, saying that bankruptcy should only be a last resort is not a good idea. What if you find yourself facing tens of thousands of dollars of credit card bills that you simply cannot pay? Should you use a home equity loan or withdraw your retirement funds to pay down this debt?
Absolutely not! These funds would be protected if you declared bankruptcy, while your credit card debt would be wiped out. Never put your most valuable possessions on the line to pay off unsecured debt.
Don't let the fear of your debt take over your life. To learn more about how to deal with debt and debt relief solutions, visit us at http://findingdebtsolutions.com.
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