Bankruptcy Doesn’t Always Follow Borrowing Money

Posted by allanmadams on February 17th, 2011 at 04:22pm

The recession changed the market

Borrowing money doesn’t mean consumers have to file bankruptcy when they get into trouble. The market is changing. The recession, along with unemployment rates, job cuts, and market conditions don’t make for the easiest of times. The good news, however, is that hard financial times have opened the doors to more options for people in trouble. Many people who formerly would have automatically looked to bankruptcy have some options now. These might just help.

Refinance a home

For consumers who are having a hard time making ends meet, now is a great time to look into refinancing. Interest rates are at all-time lows now and that can save any family a considerable amount of money on a monthly basis. People with steady income and some equity in their home, refinancing can reduce monthly expenses appreciably. In an Economy.com article, Martin Battleman said that “It’s the perfect time to talk to mortgage companies…in particular if you are a good paying customer. They don’t want to lose you and with interest rates so low, it could save anyone from financial disaster.”

Negotiate with creditors

The market downturn wasn’t good news for anyone-and that includes lenders. It’s always possible to at least call a lender and try to negotiate. Having a good payment history can put you in better bargaining posture with lenders. Don’t wait to call until you’ve missed. Being proactive is a key to overcoming financial problems. As Battleman said, “The worst thing a customer can do is wait and lag behind in payments. Too many people freeze when they can’t pay their bills instead of act quickly. Talk to your lending company as soon as you know there might be a potential problem.”

Consolidate credit-card debt

Borrowing money can become overwhelming and the number of credit cards a person has can get out of control. For anyone with a large number of credit cards, consolidation may be a helpful option. Ridding yourself of cards isn’t always best, but transferring balances to lower interest cards could reduce monthly payments. People can focus on paying off higher interest rate cards. Doing so might stave off bankruptcy and cut down on enormous interest payments.

Refinance your vehicle loans

Another good option is to talk to car lenders. A car payment is normally a large expense in a household. Sometimes you can renegotiate the payment amount on your current car loan. If not, you could refinance with a new lender with better rates. Either way, playing hardball with car lenders can work in today’s market.

The new view on bankruptcy

Borrowing money has put many people in difficult financial positions. A huge number are looking to bankruptcy to help them out of their binds, but there are other options. In Battleman’s words, “Bankruptcy is the only solution for some people-yes. But not all people. Some can be proactive and find ways to avoid something that may hamper them for ten years.”

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Tags: Amount Of Money, bankruptcy, Bankruptcy Options, borrow money, Borrowing Money, Credit Card Debt, Credit Cards Consolidation, Creditors, Financial Disaster, Financial Times, Hard Time, Home Refinancing, Market Downturn, Monthly Expenses, Mortgage Companies, Payment History, Perfect Time, Posture, Proactive, recession, Time Lows, Unemployment Rates

Under mortgage refinancing Tags: Amount Of Money, bankruptcy, Bankruptcy Options, borrow money, Borrowing Money, Credit Card Debt, Credit Cards Consolidation, Creditors, Financial Disaster, Financial Times, Hard Time, Home Refinancing, Market Downturn, Monthly Expenses, Mortgage Companies, Payment History, Perfect Time, Posture, Proactive, recession, Time Lows, Unemployment Rates