As you well know, 2008 was a terrible year for debtors of all sizes. If you are faced with a foreclosure, short sale, or just a loan modification, the associated stress and strain can be unbearable. It may help to remember that many banks and lenders were insolvent too. Here are some ideas on how to handle the stress of a debt negotiation.
Don’t let the illusion of judgment and paternalism get you down
It is strange to say, but our credit system thrives on debtors’ feelings of inadequacy and failure. It is advantageous for banks and lending institutions to feed into the commonly held perception that a person who can’t pay their loans or has lost his or her job is a bum, but it simply isn’t true. Believe it or not, your neighbors aren’t judging you and may be suffering in silence themselves. Look for support groups in your community. Some communities may offer impartial debt negotiation services that are unaffiliated with banks or lenders.
Banks and lending institutions making huge profits again
It is hard to believe that banks and lending institutions are financially solvent while you are still struggling with debt. This is important for you to remember, however. Major credit card companies and banks have posted record profits over the last few financial quarters. Many banks passed their bad debt onto the US government.
Don’t jump at ‘simple and easy’ debt consolidation offered by third parties
There are honest organizations out there that can and will help you get out from under debt. However, many debt consolidators aren’t legitimately interested in your financial future. They stand to gain a profit from the service they provide, and may only leave your finances marginally better than they were before.