Today’s economy has left many people unemployed or without adequate income to sustain their debt payments. Although financial hardships may warrant filing for bankruptcy, there are some other ways to resolve your debts without the need for court intervention.
Dealing With Debts
One avenue of debt relief that often goes unnoticed is debt negotiation. In many cases, creditors may be willing to negotiate the terms or conditions of your debts rather than risk losing money if you were to file bankruptcy. The key is open communication with your lender. Contact your creditor as soon as you lose your job, or your unemployment check stops, to inform them that you may soon experience a financial hardship. You may be able to negotiate a lower payment or extension of your payment deadlines.
Another avenue is a forbearance agreement, in which you can obtain a temporary suspension in your payment requirements. In some cases, creditors may be willing to suspend your payments for six months to a year. Student loan debts and credit card debts are both great candidates for a forbearance when you are experiencing an extended financial hardship. Secured debts, like a mortgage or car loan, are often not candidates for forbearance and require more in depth negotiations.