What to Do If You Can't Manage Your Debt

Maintaining your financial responsibilities can be challenging when households are struggling under the weight of increasing debt amounts and interest rates.
There are various ways to receive assistance if you've tried debt consolidation or refinancing your debts but are still having trouble fitting your monthly debt payments into your budget:

Call your debtors. To find out if you qualify for hardship programs like a temporary interest rate reduction, forbearance, or payment deferment, get in touch with your creditors, such as your credit card company or mortgage lender.

Describe your financial status. Perhaps you've recently lost your job or have been given a chronic health condition. In order to avoid being unfairly penalized with late penalties or other financing costs, make sure to have the specifics of any hardship arrangement in writing.

Talk to a credit counselor in person. Find nonprofit money management programs, including free financial counseling and reasonably priced debt management plans, by researching credit counseling agencies in your area.

Also, a credit counselor might be able to bargain with your creditors on your behalf to lower your interest rate or get late penalties waived.

Declare bankruptcy. A fresh start is provided by bankruptcy, which enables you to discharge substantial sums of unsecured debt that you are unable to pay back. Yet filing for bankruptcy has a lasting bad effect on your credit, and the procedure can be costly as you'll usually need to employ an attorney. Also, depending on the bankruptcy chapter you select, you could need to liquidate nonexempt assets.

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