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Tactics for addressing overwhelming debts

Many people in Virginia are vulnerable to financial hardships after a job loss or medical crisis. Although mounting debts and missed payments could cause paralyzing stress, options for taking control and relieving financial pressure exist. By taking a proactive approach with creditors, one could properly manage debt.

When a person misses one or more payments on a credit card or other type of loan, the creditor might be willing to grant a hardship status that might lower payments or create a deferment period. This could be achieved by calling the creditor and explaining the personal difficulties. For people who do not want to act alone, credit counseling services will try to establish a debt management plan. These organizations might negotiate a lower interest rate, known as a concession rate, or lower monthly payments. A person considering a credit counselor should carefully consider the fees charged for the service.

Debt negotiation firms present another route for people struggling with unsecured debts. This type of service will negotiate directly with creditors and attempt to convince them to accept a settlement offer. Typically, the settlement would need to be paid within 24 to 48 months. However, it might reduce a debt load by 50 percent.

An attorney could provide important insights and services to a debtor who is considering filing for bankruptcy. The lawyer could examine a client's income and debts to determine which chapter of bankruptcy might best reduce the person's financial burdens. An attorney could prepare documents for the court and take direct actions to stop creditor harassment, foreclosure or wage garnishments. As the court considers a bankruptcy case, the lawyer could negotiate with creditors and present evidence of the person's hardships and inability to pay.

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