By: Zalutsky & Pinski

Last week we gave you strategies for repaying your credit cards faster and with less interest. This article is designed for those who can’t afford even their minimum monthly obligations. Specifically, we are going to give you solutions for dealing with things like credit cards, medical bills, and personal loans. Also included are certain items sent to collection including deficiency balances on cars and back utilities. We will discuss other types of debt in future articles

Below is an overview of available options. We will get into greater detail in the coming weeks. Once again, it is important to reiterate that seeking professional help is always recommended.

• Consolidation: Repay your debt through a credit counselling agency or debt servicing agency. These agencies create a repayment schedule to pay your creditors a reduced amount. In picking an agency be sure they are non-profit and that you know exactly how much they are charging. The Better Business Bureau and consumer protection agencies get numerous complaints about these types of companies, so be careful. Further, please be aware that you will likely be signing up for up for a long-term commitment.
• Debt Settlement/Negotiation: Many of your outstanding accounts can be settled for far less than what is actually owed. The amount you settle the debt for is usually dependent upon whether you can pay a lump sum amount or looking to pay in installments. Make sure any settlement is put in writing. While settling the debt can be a great idea, be careful. There can be tax consequences to debt settlement.
• Bankruptcy: Under this federal court proceeding, your debt can be eliminated through a chapter 7 or reorganized in a Chapter 13. Chapter 13 is different from a debt management plan because it is overseen by the federal court and creditors are bound by the bankruptcy code and the court’s decisions. What chapter best suits your needs can be determined by sitting down with an experienced bankruptcy attorney.

Once again we will be covering these option in greater detail in the coming weeks. However, if you would like more information or to discuss options including debt settlement or bankruptcy, contact us at 312-767-0111, via email at News@zaplawfirm.com or on the web at ZAPBillsNow.com.