Can’t Pay the Bills

Making Decent Money and Still Can’t Pay the Bills?

You work all the hours available and are still being overwhelmed by debt, so what can you do? Many hard-working Americans are faced with crippling debt each year can can’t pay the bills, despite the fact some are working two or more jobs. It is safe to say debt is often the result of overspending. However, in other cases, the debtor has medical or other necessary expenses to pay that puts a serious strain on a budget. 

When you reach the stage where it seems impossible to ever get out of debt, taking steps to address the situation becomes inevitable. It is better to seek solutions to your debt sooner rather than later, so don’t be afraid to admit you need help and take any appropriate actions. Just make sure to read all the fine print when it comes to choosing your option for getting out of debt.

Negotiating with Creditors

Creditors may prefer you to make contact with them when you are struggling to meet your payment obligations. There may be room to negotiate your payment or even reduce the debt if you can pay the final total in one lump sum. It may sound counterintuitive but getting rid of one debt completely will give you more in your budget to cover other debts going forward. Plus, creditors are often more inclined to give you a dramatic discount on the final sum if they believe maintaining a monthly payment plan that has already lapsed is a risk. However, you may be issued a 1099 for a cancellation of debt, which could cause you to owe taxes. You should consult an accountant to determine the tax consequences of negotiating to reduce a debt.

Debt Consolidation Loans

A consolidation loan may help you organize your debts in a way that is more manageable. Instead of multiple payments, which can be hard to keep track of, a consolidation loan means paying a single monthly payment. If you are considering a consolidation loan, it is important to check for hidden penalties and fees. You should also look for a loan that is less overall than your combined debts – especially if you are struggling because you don’t make enough to cover debts in the first place. Keep in mind a consolidation loan may cause you to pay additional interest on unsecured debts which you otherwise may not have to pay or may not pay in a bankruptcy case.

Declaring Bankruptcy

You may be able to declare bankruptcy as an individual depending on your income and other factors. In order to qualify for Chapter 7, you will need to pass a means test. Other factors concerning income and what assets you own must be considered as well. To qualify for Chapter 13, you will need to show you are financial able to maintain a repayment plan for 3-5 years, which includes consideration of all your debts, including but not limited to a mortgage, vehicle loans, credit cards, and medical bills.

Discussing your financial situation and debts with a bankruptcy lawyer will help you decide whether a Chapter 7 or Chapter 13 bankruptcy is the best option for you. The opportunity to have certain debts discharged may help you escape smothering debt. Choose a bankruptcy lawyer who understands the complexities of Chapter 7 and Chapter 13 bankruptcies by placing your trust in H. Lehman Franklin P.C. in Georgia.

Speak to a bankruptcy professional today by calling our offices at 912-764-9616 or email at