My Civil Advocate

You have excellent credit, but you've racked up some substantial medical bills. Is filing for bankruptcy a viable option? Your good credit will definitely take a hit if bankruptcy is filed. On the flip side, if unpaid medical bills prompt a flurry of late-payment notices, and eventually the medical provider hands you over to collections or wins a court judgment against you, that doesn't bode well for your credit rating either. Filing for bankruptcy is a tool to help you regain your financial footing, but it should be a last resort. Explore other options first. For instance, make sure all your available insurance coverage has been utilized. In addition, if your bill (or a chunk of it) was for uninsured medical costs, your medical provider may offer a significant discount. Depending on your income, you may qualify for the Disproportionate Share Hospital (DSH) program, which affords you free or reduced-cost hospital care for medically necessary services. If filing for bank...

Teetering on the edge of foreclosure can be an unsettling experience, to say the least, but you have options to avoid it: Loan modification: Most lending institutions are open to changing the terms of your loan to make it more manageable. Foreclosure doesn't benefit either party. Repayment plan: If you are behind on mortgage payments, many lenders are willing to offer a repayment plan that enables you to make up missed payments gradually, not in one fell swoop. Forbearance arrangement:  If you financial difficulties are temporary in nature, a lender may agree to this process. The mortgage payer is granted a 3-6 month reprieve from payments. After this period, the payer resumes payments, plus some extra to make up for the skipped payments. Refinancing:  If the current mortgage rate is below what you're paying, your rate can be readjusted through financing to lower your payments. Short sale: If you owe more money than what your home is currently worth, short selling ma...

If you're pondering whether to utilize a Debt management Program (DMP) or file for CHapter 13 bankruptcy, consider the following: Many credit-counseling agencies have pre-arranged terms with credit card companies for repayment. The interest rate may be reduced, but there will still be interest to pay. Filing for Chapter 13 bankruptcy enables the debtor to pay off debts with zero percent interest and provides a legal means to eliminate debt. Income left over after a reasonable family expenses goes toward paying off your debts. Anything you can't be paid will be eliminated or discharged.  DMP's are dependent upon all creditors agreeing to the plan. If just one balks, it may throw a monkey wrench into the whole plan. Creditors have no influence on a Chapter 13 filing. These filings are approved by a court of law.  Most DMPs establish a budget and monthly payment amount. By the time arrangements are worked out with creditors, you might wind up having reports of late p...

If credit card debt has you stuck in a financial hole, there are solutions at your disposal. First, take an in-depth look at your finances. Reduce spending where possible, take on a second job if necessary, and pay down your debt over time. It requires dedication, but its well worth the effort. However, if your income simply can't keep up with debt, you may have to consider alternatives. Debt management plans involve a third party - usually a nonprofit credit counseling company or a for-profit debt management company- that reviews your financial particulars and negotiates with credit card companies on interest rates, and sometimes balances. A single monthly payment is made to the third party, which distributes the funds for you. Make sure you thoroughly understand the fee arrangements. Negotiate with credit card companies. you may be able to slash interest rates or significantly lower your total balances, especially if you pay off a renegotiates balance with a lump sum. Up-fr...