Wednesday, September 14, 2016

What To Do When You Don’t Have Enough Money Each Month

If you have ever been behind on a credit card payment, auto installment loan, or mortgage, you know it is no fun to have more bills than money each month. Not having enough money to pay for all of your expenses means you have to decide what gets paid, and what has to wait. Playing this game can be dangerous, because it can cause your creditors to initiate collection actions against you, or in the case of secured debt it might cause the lender to repossess pieces of personal property or to foreclose on your home. This is no way to live, and can quickly spiral out of control if not addressed.

If you have more bills than you have income, here are a few things you can do to get your finances back on track:

         Contact the lender to negotiate a lower interest rate, or lower payment amount.

         Consolidate your debt into one loan, with an overall lower rate on average than what you are paying now on things like credit cards and signature loans, which gives you the ability to make one payment per month instead of several.

         Refinance your home at a lower rate, or longer repayment term so the payment is more manageable.

But perhaps the best option is to file for bankruptcy. Many lenders are unwilling to negotiate on debts that are past due, and will instead charge you late fees and other penalties that can eventually add up to more than the initial balance. Loan consolidation is also tricky because you have to make certain the rate and payment scheme is really lower, looks can be deceiving and you might end up paying more with just one payment than if you stayed the course. And refinancing is always a question mark. Most home lenders will only refinance when the loan payments are current, and if you are behind on payments this will not be an option. The beauty of bankruptcy is that is allows you to get a break from collection calls and lawsuits so you can take stock of your financial picture. Without the harassment, you are better able to get a clear idea of where you want to go, and what is needed to reach your financial goals. Bankruptcy also allows a debtor to eliminate some of their debt, or pay a lower amount than what is owed. The bankruptcy structure is such that when you come out of your case, you will stand on new financial ground and can get a fresh start where your money is concerned.

If you have more questions about bankruptcy or need help deciding what to do about overwhelming debt, contact us at We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.

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