The Dangers Of Consumer Debt | Finance @ Redbright

Bearing in mind that consumer debt is at an all time high. Being in a big debt can feel overwhelming. Many people have looked to the internet for a source of consolation and have seen advertisements touting credit counseling as a quick fix. As enticing as these ads may seem. It is vital to be on the lookout for the validity of the claim.

A good share of these promises are a quick fix, but that quick fix might be bankruptcy. Yes, bankruptcy is one way to deal with your financial problems, but in most cases it should be a last resort. The fact that you filed for bankruptcy stays on your credit report for ten years. Which means that your possibility of getting a place to live, credit or employment or insurance are significantly lowered. Although it might be a quick fix, long term it can really undermine you.

It is always a fine idea to think about other options before making the decision to file for bankruptcy. Talk with your creditors. Numerous times a payment plan can be worked out that is modified or can be paid in installments. Credit counseling services can work with you and your creditors to make debt repayment procedures. Which can eventually help you get rid of your debt.

When you are bearing in mind a second mortgage, be careful. These loans require your home as collateral. Bankruptcy can end foreclosures, debt collection activities and it may get rid of unsecured debts. Exemptions are provided that let you keep particular assets. However, personal bankruptcy does not usually take away child support, fines, taxes, alimony and in a few occasions student loans.

It won?t normally let you keep your property if your creditor has a security lien or mortgage that has not been paid yet. A somewhat recent twist in bankruptcy laws creates certain hurdles that you must overcome before you can even file for bankruptcy, no matter what type of bankruptcy. First, you must get credit counseling from an organization recommended by the government within six months before filling. Additionally, in certain cases you have to pass a test that requires that you corroborate that your income doesn?t exceed a certain amount. These are all done to confirm that you?re making a precise amount of.

Take on Rapid Recovery Solutions as your collection company today. For information on any type of debt including commercial debt collection, contact RRS today!. Also published at The Dangers Of Consumer Debt.

Source: http://finance.redbright.co.za/the-dangers-of-consumer-debt/

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