When you are drowning in debt and feel like there is no way to get out of the situation, you may panic and overthink, only to end up not doing anything about the problem. It is important to act quickly to rebuild your financial health to avoid bigger problems down the lane. Fortunately, there are a number of solutions available, but most people do not realize what they are.
It is best to consult with a financial expert and see what they suggest in a situation like this. Financial consultants usually keep bankruptcy as a last resort for obvious reasons. However, if you are considering bankruptcy, you should contact bankruptcy attorney Corey Mills as soon as possible.
What to do when you are drowning in debt?
Contact your creditors.
The biggest mistake people make when they are under a huge debt is to ignore and avoid their creditors. This makes them more irritated and angry, and they are more likely to file a lawsuit against you. Talk to them and see if you can work together to modify the loan agreement. If you have paid your bills on time in the past, they may be willing to give you more time or arrange something that makes it easier for you to pay them.
Make a budget.
Not working on a budget and spending whatever and wherever you feel like is the first step to financial destruction. Living on a budget is even more important when you have borrowed money from multiple parties. Determine your essential costs, such as housing, groceries, transportation, education, etc., and determine how much you are left with monthly. If you are not left with much, list and avoid some unnecessary expenses.
Be wary of loan consolidators.
One thing you must be very careful about is a loan consolidator. They are unofficial creditors who give you a huge sum of money to pay off all your debts, and then you owe money to only one entity. The good news is you only pay one check a month, but the bad news is that their loan interests may be extremely high. Only consider a loan consolidator if their interest rates are reasonable.
Keep bankruptcy only as a last resort.
It is not legally and financially recommended to resort to bankruptcy unless absolutely necessary. The federal government only helps people through bankruptcy who have no other option. For example, if you have expensive jewelry or a piece of land that you can sell and use the money to pay off the debt, there is no point in filing for bankruptcy.