Seven Years Of Financial Hardship Is A Long Time

Category: Finance, Credit.

Bad credit.

One BIG problem. Two little words. Today, with companies downsizing and the increasingly high cost of living, most Americans are one paycheck away from financial disaster. Then, begins the economic shuffle. An unexpected hospital bill, or the car breaks down, and many people are scrambling to figure out how to pay the mortgage or put food on the table. One month the rent is paid, the next only a partial payment to keep from being evicted.

The downhill spiral begins. The next month, the rent is caught up, but the car payment slides. Like an airplane, economic recovery is possible. For a fortunate few, a financial crisis does not lead to bad credit. Unfortunately many people crash and burn, not knowing how to survive money troubles. Should the car break down, unexpected medical bills threaten the budget, or innumerable other reasons for financial stress, most companies are willing to work with the consumer. Companies generally hate resorting to bill collections, repossessions or disconnections.

Payment plans can be arranged, until the bills are caught up. The process is actually an added expenditure for them. Similar to a pilot unable to pull up and stabilize a flight in a downward spin, if an individual fails to make payment arrangements with creditors, the end of economic freedom is near. Therefore, if the customer calls and explains the situation, most businesses are more than willing to come up with a feasible plan for easing financial woes. An individual labeled by bad credit will first experience the frustration of having the utilities disconnected. In addition, reestablishing service is very costly.

After a letter of notice, a service provider can even turn off the source of heat, as long as the city is not suffering a life- threatening freeze. The consumer will likely be required to pay the previous bill in full, pay any applicable fees related to the disruption of service, and he/ she will generally have to pay a generous deposit, to ensure payment in the future. Chances are, a cosigner will be necessary to guarantee payment, and the individual will have to find a good friend or family member to loan the funds necessary to satisfy the bad credit debt. Essentially, the consumer will be out even more money, eliciting even further financial stress. Oftentimes, if an individual is suffering an economic crisis severe enough to require cessation of services, he/ she also experiences repossession proceedings. One of the first items to be repossessed is often the family vehicle. If bills go unpaid for items bought on credit, the lender can, like an automobile come collect the purchase, and try reselling the item to recover the amount owed and the subsequent costs incurred.

Without transportation, an individual has even further difficulties establishing resources to get back into financial good standing. Economically speaking, the crash is bad and the financial plane is burning out of control. Also, a person may be required to sell off personal property to cover the cost of a bad credit debt. Not only has the car been taken away and the utilities been shut off, the stores have black balled an individual with bad credit. If credit cards have been used in the past, the plastic money has been cut up into little pieces. Yes, the person may still purchase items, but on a cash only basis.

Checks are now simply a piece of paper. Even out- of- town creditors will request a money order, to ensure payment. With bad credit, a business cannot be sure the amount will be honored, when the check is deposited. Unfortunately, getting a money order can be difficult, especially with no car. So the financial aircraft is burning out of control. Plus, a person will have to pay for the privilege of obtaining the money order. Not having money is actually costing additional dollars, and there seems to be no light at the end of the tunnel.

However, bankruptcy should only be a LAST resort. As a way out, many people opt to file for bankruptcy, due to bad credit. The decision to file means at least seven years of bad credit. Also, if the economic woes continue, the one way out cannot be used a second time. Meaning, getting loans for a vehicle, or any other, a house necessity is practically impossible, even if financial hardship is in the distant past. Two bankruptcies at one time are not possible.

So, filing bankruptcy, to alleviate bad credit, should be the final recourse. Seven years of financial hardship is a long time. If services have been discontinued, or items been repossessed, further financials dealings will be on a cash only basis. During times of hardships most companies are willing to work with the consumer, and help him/ her pull out of financial despair, and avoid the crash of bad debt. Therefore, before financial flying goes into an unrecoverable tailspin, contact creditors in an emergency.

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