Credit counseling is a way to lower your medical debt or credit card arrears but it doesn’t come with a guarantee that the organization can completely negotiate or settle your creditor’s debt with regards to credit card, medical debt or other unsecured debt.
It is significant to understand that you have three valid options and a worst scenario alternative available in such a case:
- Bargain directly with the creditor (hospital, credit card company)
- Use home equity to pay debt (assessed values of the house)
- Use unsecured debt professionals (credit counselor)
You should negotiate with your creditors the moment you feel that you cannot make the payment. Bargaining with the collection agency is quite difficult in comparison to a doctor, hospital or credit card company.
Mortgaging your house is yet another option. When the house prices are downward, you cannot afford to go for remaining equity. Refinancing is only beneficial to clear out the medical debt, if the rate of interest is less than your present loan. However, keep it as your last option as refinancing sometimes ends up costing eventually more in the long run. You can always opt for option first and third before choosing this refinancing.
Your next option is to join hands with debt specialists that majorly concentrate on credit card debt and medical debt. Some companies basically can reduce your debt or lower the money owed by you in exchange for a small fee as they are professionals in the debt negotiation field. It is crucial to ensure that the company you are working with stands approved on the state’s credit counseling list. There are several agencies, fiscal institutes, credit unions, local government which offer help with debt counseling.
Lastly, you just have one option and that is to declare yourself bankrupt. Bankruptcy is malicious and leaves you with simply nothing. But in some cases, it stands reasonable. Basically it tarnishes your credit report for a period of 10 years thereby making you disqualified for mortgage, credit cards as well as car loans. But there are things which you cannot ignore with bankruptcy like alimony and back taxes, students loans and lastly children support. Additionally, the info of your bankruptcy is made publicly by local authorities, State and Federal authorities. In short, it is not a recommended option.
All in all, credit counseling is a perfect opportunity if you do not have enough time to bargain with your creditors. Seeking help from professionals is one of the best ways to achieve victory over medical debt. It is crucial to be active with your medical debt and make use of all the options as and when necessary. Every option is effective for a condition and for making manageable payments monthly. Going debt free isn’t an easy job, but with right consultancy and perfect advice, you can surely accomplish it. Visit here to get credit counseling for your case. With professional advice sought personally for your condition, you can easily attain a debt free and independent life for yourself.