Borrowing money doesn’t mean consumers have to file bankruptcy when they get into trouble. The market is changing. It’s not as easy as it once was to manage due to the recession, unemployment rates, job cut-backs, and overall market problems. The good news, however, is that hard financial times have opened the doors to more options for people in trouble. Many people who formerly would have automatically looked to bankruptcy have some options now. Here are a few that may help.
For consumers who are having a hard time making ends meet, now is a great time to look into refinancing. Interest rates are at all-time lows now and that can save any family a considerable amount of money on a monthly basis. For consumers who have steady income and some equity in a home, refinancing can be a good way to reduce monthly expenses. In a recent Economy.com article, Martin Battleman said, “It’s the perfect time to talk to mortgage companies…in particular if you are a good paying customer. They don’t want to lose you and with interest rates so low, it could save anyone from financial disaster.”
The market downturn wasn’t good news for anyone—and that includes lenders. It’s always possible to at least call a lender and try to negotiate. If you have a good payment history, you’ll have extra negotiating power with the lender. Don’t wait to call until you’ve missed. A proactive approach is key to overcoming financial hurdles. As Battleman said, “The worst thing a customer can do is wait and lag behind in payments. Too many people freeze when they can’t pay their bills instead of act quickly. Talk to your lending company as soon as you know there might be a potential problem.”
Borrowing money can become overwhelming and the number of credit cards a person has can get out of control. Consolidation could be good for people with multiple credit cards. Ridding yourself of cards isn’t always best, but transferring balances to lower interest cards could reduce monthly payments. Consumers can also strategically focus on paying off higher interest cards. Doing so can cut down on large interest payments and help stave off bankruptcy.
Another good option is to talk to car lenders. A car payment is normally a large expense in a household. Sometimes you can renegotiate the payment amount on your current car loan. If not, you may be able to refinance with a new lender at a more favorable interest. Either way, playing hardball with car lenders can work in today’s market.
Borrowing money has put many people in difficult financial positions. A huge number are looking to bankruptcy to help them out of their binds, but there are other options. In Battleman’s words, “Bankruptcy is the only solution for some people—yes. But not all people. Some can be proactive and find ways to avoid something that may hamper them for ten years.”