(Newswire.net — March 15, 2021) — Managing your finances in the best of times is challenging enough. Overcoming debt and making the best use of your fiscal resources after an economic hardship is even harder. Fortunately, Resolvly, an industry leader in debt resolution, can guide you toward a healthy financial future and help you to prepare for potential future challenges.
Which Debt Should I Pay First?
One of the biggest problems associated with financial hardship is the inability to pay back existing debts. However, it is important to keep in mind that not all debt is the same. There are two primary categories of debt that you will likely encounter: Secured and unsecured debt.
Secured debt involves collateral, usually in the form of a vehicle or home. If a secured debt is unpaid for too long, you are at risk of losing your collateral. While missing out on unsecured debt payments is not desirable, the consequences are usually not as severe.
With that in mind, it is usually wise to prioritize secured debts. If skipping a couple of credit card payments allows you to get current on your mortgage, then it might be a worthwhile trade-off.
Communicate with Lenders
A common mistake that debtors make is to ignore their lenders. When you miss a payment (or payments), the creditor will begin reaching out via phone calls, emails, or letters. While speaking to these collection agents may be at the bottom of your to-do list, it can help you buy time.
Many lenders will work with you. They may be able to do things like adding the missed payments onto the end of your loan or creating a payment plan to spread out the cost of the overdue amount onto future bills. However, if you plan to file for bankruptcy or have no assets to repay your debts, then communicating with your lenders will not be very fruitful.
Should I File for Bankruptcy?
While in the midst of financial hardship, it may be tempting to file for bankruptcy. Bankruptcy is a federal court remedy often referred to as “liquidation” or “reorganization.” It has several far-reaching consequences that many consumers often overlook, such as:
- A loss of access to your credit cards
- Severe impact on your credit score
- Makes obtaining a loan or mortgage extremely difficult
- Loss of real assets, such as personal property and real estate holdings
- May make you ineligible for tax refunds
- Stigma when applying for jobs or seeking housing
- Non-dischargeable debts will still be your responsibility
Do not make a rushed decision that will impact your financial health for years to come. A better option is to protect and enforce your legal rights when dealing with debt collectors. Resolvly can help by connecting you with an experienced consumer protection attorney who specializes in debt resolution.
An attorney can negotiate with creditors on your behalf and obtain a favorable resolution. You can achieve a better end-result while maintaining access to your valuable resources.
Create or Reassess Your Budget
The key to getting out of debt is smart money management. Even if you have to resort to bankruptcy to overcome your debt, you will need a well-planned budget to maintain your newfound financial freedom. As mentioned above, you should prioritize your secured loans and other bills that are integral to daily life.
Overcoming financial hardship is no easy task, but you don’t have to do it alone. Resolvly can help you through with their comprehensive debt elimination and credit card relief services. Contact them today and start your journey towards financial freedom.
About Resolvly
Resolvly is a Florida Bar-approved lawyer referral service that helps clients nationwide to connect with consumer protection attorneys that specialize in debt resolution. Founded in 2015, the Boca Raton-based company has become an industry leader by helping thousands of Americans find the right, legal-based solution to reduce or eliminate their unsecured debt. Resolvly adds a personal touch to debt assistance, and our ultimate goal is to help clients with their current debt while empowering them to not end up in the same position in the future.