Borrowing money won’t always lead to bankruptcy
The recession changed the market
Borrowing money doesn’t mean consumers have to file bankruptcy when they get into trouble. The market is changing. It’s not as easy as it once was to manage due to the recession, unemployment rates, job cut-backs, and overall market problems. The good news, however, is that hard financial times have opened the doors to more options for people in trouble. Many people who formerly would have automatically looked to bankruptcy have some options now. These might just help.
Refinance your home
For consumers who are having a hard time making ends meet, now is a great time to look into refinancing. Interest rates are at historic lows, and it is a great time to try and reduce your monthly bills if possible. People with steady income and some equity in their home, refinancing can reduce monthly expenses appreciably. In an Economy.com article, Martin Battleman said, “It’s the perfect time to talk to mortgage companies…in particular if you are a good paying customer. They don’t want to lose you and with interest rates so low, it could save anyone from financial disaster.”
Negotiate with your creditors
The market downturn wasn’t good news for anyone—and that includes lenders. It’s always possible to at least call a lender and try to negotiate. If you have a good payment history, you’ll have extra negotiating power with the lender. Don’t wait to call until you’ve missed. A proactive approach is key to overcoming financial hurdles. As Battleman said, “The worst thing a customer can do is wait and lag behind in payments. Too many people freeze when they can’t pay their bills instead of act quickly. Talk to your lending company as soon as you know there might be a potential problem.”
Credit card debt can be consolidated
Borrowing money can become overwhelming and the number of credit cards a person has can get out of control. Consolidation could be good for people with multiple credit cards. Ridding yourself of cards isn’t always best, but transferring balances to lower interest cards could reduce monthly payments. Consumers can also strategically focus on paying off higher interest cards. Doing so might stave off bankruptcy and cut down on enormous interest payments.
Refinance your vehicle loans
Another good option is to talk to car lenders. A car payment is normally a large expense in a household. You can negotiate payment amounts on current car loans. If not, you could refinance with a new lender with better rates. Either way, playing hardball with car lenders can work in today’s market.
Views on bankruptcy
Borrowing money has put many people in difficult financial positions. A lot of people look into bankruptcy to get out from under their burdens, but other options exist. In Battleman’s words, “Bankruptcy is the only solution for some people—yes. But not all people. Some can be proactive and find ways to avoid something that may hamper them for ten years.”