Categories
credit credit card

Frequently Asked Questions About Credit Card Debt Consolidation

You have a credit card, mortgage, car, and other personal assets all where other credit cards are concerned. For example, you may be working part-time and living expenses for a financially-charged employer, but your home, car, and other assets are not. Thus, the temptation will be great enough for most people to consider declaring bankruptcy. You might be wrong. However, many people find that declaring bankruptcy does not make any sense.

A bankruptcy filing for a personal debt will show some records. These are not records of how you actually paid previous debts, but instead of showing your creditworthiness, it will show your past payments, plus up to the date balances. You must have paid at least your minimum spending requirements on the home, automobile, and a host of other loans.

Applying for Bankruptcy is an alternative to debt elimination. However, it cannot eliminate the problem of your recent debts; every solution that you propose must be based on evidence you use. You simply can’t go back to paying off old debts unless you get the card you just lost. And while you were paying off your old debts, you “earned” that money using your credit-card accounts.

Take note of what your monthly statements show each month. Are you making timely payments on more than one of your accounts? Are you current payments timely enough to overcome your current accounts balances? If all else fails, what will you do? You declare bankruptcy.

It’s easy to forget. We forget our credit cards, mortgages, and other personal assets in our lifetimes. We get into debt all the time. It doesn’t just happen. Don’t expect us to be in debt forever. If so, you ‘should’ avoid it. Instead, take control of your financial mess by making a plan to pay off all previous debt within a reasonable time frame. By taking the time required to pay all outstanding debts on time, you’ll be in a much better financial position each month in which to make the most of your available credit.

In my own case, I have decided that it’s time to declare bankruptcy – because that’s exactly what I want to happen. But before I get to that strategy, I want to clarify a few key differences between declaring and discharging an outstanding debt. It has become an accepted part of credit cards that doesn’t have to be disowned. I didn’t invent this ‘debt management’ about to become a money-grabbing experience. The ‘credit card for fools’ has always been more dangerous than the debt consolidation option.

Are you a person who has no control over your own financial situation? I don’t think so. Instead of trying to force myself to declare bankruptcy to avoid the debt consolidation option, you could try to negotiate with your creditors to reduce your current and mounting bills for various debts. Most creditors would be reluctant to do that. To be sure, there are some offers; the goal is clearly to get out of debt. However, you’ll be better able to control your finances than you are if you use your own accounting devices. You would have a better chance of success than if your creditors are simply trying to extract pennies on the price you are paying.

There are a number of aspects to discharging an outstanding amount of personal debts. You will have a better chance of success than if you use your own accounting devices. However, it might be time consuming for you to do this. There is no better method of bankruptcy than debt negotiation. If it takes you more than two years you might want to consider bankruptcy. If it takes you a lot less time to get out of debt, you might want to speak with a financial expert or manage a small business more efficiently.
If you don’t use your credit cards but keep a home equity loan, you could try to borrow the money from a bank or payday loan company instead of paying off existing debts. This is a way to pay off the credit cards before anything else. Or perhaps you get the chance to do that after you declare bankruptcy. Don’t fall victim to the idea that you can run up your own credit card debt either by paying the balance. Make it simple. Debt consolidation will help you do that.

You will also need a budget. Your credit should be separate from your finances. Don’t rely on the word of a bankruptcy judge to give you justification to keep your credit cards. You’ll get out of less than four years of debt and have good credit, but you’ll still have a better chance of succeeding in the next two years than you did when you first filed bankruptcy.

There may be cases where the best course of action is to declare bankruptcy and use a home equity loan instead. But it is always better to be selective when choosing a loan.