Dealing with debt is a difficult experience for many Americans who are trying to build a better financial future. With so many different types of debt out there, there are countless resources offering helpful tips, valuable advice and endless opinions on the matter. Sadly, not all of these actually offer real debt relief options for the struggling consumer. You may not realize is that these many forms of “debt assistance” could cost you more than you think.
Common solutions include suggestions like spending less, earning more, steadily paying down each credit card from the smallest balance to the highest balance and so forth. The approach is conventional and straightforward, using a simple combination of basic math and willpower. We are told that if we keep consistently working on our debt in these ways, it will soon become manageable. However, the truth is that most of these solutions fail to outline the fact that you can still fall victim to your debts, even if you have managed to successfully pay all of them off.
Earning more, spending less, and debt roll up tactics aside; there are many resources out there that show how additional debt relief options can help you out. One half of all debt assistance programs such as debt settlement programs, credit counseling and chapter 13 bankruptcies have failed to accomplish the advertised outcome of getting consumer debts paid down to a $0 balance. Debt is more than a minor financial setback; it is a major dilemma that can lead to other, even larger problems down the road.
Choosing to go the route of consolidating your credit card debts into one payment can have shocking repercussions for those who also want to save money for their future. For example, a 30 year old consumer owing $20,000 worth of debt may opt to consolidate their credit cards through a nonprofit counseling agency. Their monthly payment may be considerably lower—only a few hundred dollars a month, spanning over 5 years. To this consumer, their total repayment amount is only a few thousand dollars more than the total debt they owed. In actuality, if that same individual had put that monthly amount in a retirement fund, they could have expected over $30,000 saved and counting until retirement age.
The same can be said for those agreeing to take a debt settlement. By accepting to pay a lesser amount through settlement, you could be stopping yourself from allowing that money to grow in a retirement savings fund. Many times, consumers sacrifice their own future financial control by seeking debt assistance that will only hinder them in the long run.
Another option that has proven to help consumers truly free themselves from debt is the option of Chapter 7. The average cost of filing Chapter 7 is between $1,500.00 and $1,800.00 and it can take as little as 90 days. The long term results from a Chapter 7 can be a full discharge of your debts and a chance to start over with a clean slate.
Filing for a Chapter 7 bankruptcy offers the advantage of the chance to start over, compared to other forms of debt relief out there. Immediate debt relief solutions can greatly compromise future plans, where Chapter 7 can provide you with the much needed opportunity to wipe out all of your debts so you can build for the future. For some, avoiding bankruptcy may seem like a winning feat, but jeopardizing your future by not filing is a losing battle.
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.