No one wants to be in over their head in debt, but pursuing a structured debt settlement or filing for bankruptcy isn’t always the best idea. In fact, there are some situations in which certain debt resolution strategies may actually work against you. Before agreeing to a drastic debt reduction solution, evaluate whether your situation really fits the bill.
Yea or Nay
Those in debt are often pushed to the point of feeling overwhelmed by their debts. When the pressure mounts people may not see their financial clearly for what it actually is. Although missed payments and the risk of asset liquidation is scary, it doesn’t always mean the end of the line. Debt isn’t black or white, there is much gray in between and the severity of debts are a sliding scale. Structured debt settlement and bankruptcy should only be considered if:
- Other debt management options, such as credit counseling or debt negotiation, have been pursued
- Multiple payments have been missed with added penalty fees that put repayment out of reach
- A foreclosure or repossession notice has been received
- You have reviewed your situation with a bankruptcy attorney
Pursuing the wrong type of debt resolution strategy can lead to unnecessary consequences. Credit damage, further financial burden and years of hassle regaining control over finances can result when the debts are not handled correctly. Always be sure to seek qualified counsel when reviewing debt management options.