Help for People With Debt Problems
Debt problems can easily overwhelm people who face changing employment circumstances, health crises or poor financial self-management. The Federal Trade Commission mentions several possible solutions, ranging from counseling to bankruptcy.
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Counseling
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If debtors cannot manage their own debts or negotiate lower payments with their creditors directly, they may consider working with a credit counselor to develop a workable repayment strategy. Credit counselors often enroll their clients in debt management programs that involve regular monthly payments.
Repayment Strategies
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Debtors may obtain a consolidation loan, using their homes as collateral, to help repay debts. Some companies offer debt negotiation programs that attempt to get creditors to accept a lesser amount, but the Federal Trade Commission warns that these programs do not always work as advertised.
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Bankruptcy
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In the most serious cases, debtors may exercise their right to file for bankruptcy. Bankruptcy gives debtors protection from their creditors' attempts to collect, with the debtor's assets sold by a trustee and the resulting money distributed among the creditors. Because bankruptcy tarnishes debtors' credit ratings for 10 years, the Federal Trade Commission recommends it as a final option only.
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