Dealing with debt can be very stressful. As you prepare for the coronavirus’s potential financial consequences, there are a number of steps that can help you manage your debt during these difficult times.
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Contact lawsuit lenders if you are at risk of losing your home
If you think you may fall behind on your mortgage, car loan, injury loan, credit card, student loan, or any other debt, call your lender and explain your situation. Available lawsuit companies like Baker Street Funding may offer personal injury plaintiffs with financial assistance programs, also known as “legal non-recourse advances” to help you with your hardships. To receive a settlement funding offer, you will have to communicate with the lender proactively and must be represented by an attorney.
Contact personal loan lenders not being able to make your payments
Other programs from personal loan companies like Lending Club personal loans may include the ability to delay or adjust some payments temporarily. In some cases, they may allow you to avoid charging interest. You could also prevent a negative credit report by signing up for the program before falling behind on your payments. The lender may also offer you long-term programs, such as plans designed to allow you to pay off the debt over a specified period at a reduced interest rate.
When you contact lenders, be prepared to discuss your financial and employment situation, as well as how much you can afford to pay, considering your income, expenses, and assets. You can also ask them:
- Do you have assistance programs for people who have experienced losses due to the coronavirus pandemic?
- What are the consequences of subscribing to an assistance program?
- Will I owe more money in the end?
- Will this affect my credit limit?
- Will this affect my credit reports?
- If I still have financial difficulties at the end of the assistance program: What are my options?
Consider working with a credit counselor.
Credit counseling agencies are generally non-profit organizations that can advise you on money and debt matters. While working with a credit counselor like Consolidated Credit Counseling Agency, you should be prepared to discuss your financial situation, your employment status, and your financial goals, as well as your income and expenses. When you work with a credit counseling agency, make sure they can help you understand how to handle your debt. Many of these agencies also advise on housing issues, in case you have a mortgage. Reputable nonprofit agencies often offer free sessions to help you budget, and during sessions, they may:
- As part of your initial analysis to make your free estimate, they may help you adjust your expenses so that you can pay off your debts more quickly.
- Assist you in finding the types of emergency assistance programs lenders have available to consumers, and whether they are appropriate given their financial situation. This can be particularly useful if you have many accounts, or are having difficulty evaluating your options.
- Suggest that you join a plan to manage your debt. These programs help you provide a consolidated monthly payment, for a specified period of time, which the counseling agency then delivers to all of your lenders. Generally, this involves closing most of your accounts, and establishing a fixed payment plan, usually at a reduced interest rate.
Be careful when seeking debt relief.
When looking for debt-relief options, make sure you understand how the program works and the potential risks of enrolling in it. There are many companies and organizations that advertise to help you find “debt relief” or relief, simplifying or reducing, “consolidating” or consolidating, or negotiating your debts. However, the programs they offer can be very different. Make sure you understand if the company is offering:
- A consolidation loan
- Credit counseling
- Debt negotiation
- Or any other offer
Consider all of your options, including refinancing through a balance transfer or loan, working with a non-profit credit counselor, or negotiating yourself, directly with the lender or debt collector. Debt settlement companies, which could be marketed as “debt settlement” or “debt relief” companies, often claim that they could negotiate debt reductions.
