Learn why your effective credit management can lead to you achieving at a level that is your absolute best…
In the current economy difficulty in the management of credit occurs on a constant basis and there are those (retailers, credit card issuers, finance companies, debt settlement and bankruptcy attorneys among others) who may be working against your best long-term interests who are lurking and waiting on you to respond to their tempting offers.
If you are now mismanaging your finances or you find yourself with excessive credit card or other outstanding debt, it is important that you discover what you can do to make your debt pay down or debt payoff dreams come true so that you can really do what you WANT or NEED to do–as now may be the best time for you to concoct a new brew (learn a new way of looking at and acting on your credit and finances that allows you to achieve more)!
You want to gain the knowledge that you need to succeed prior to running into financial difficulty or being forced to pursue options that are unfavorable for your long-term success.
- Debt Settlement Companies May Not Be Your Best Option
Many debt settlement companies will offer to negotiate your debt settlement, but is that really the best option for you to take? Like most things in life it depends, however you want to first determine for yourself if there is a potential way out of your financial dilemma that does not involve the utilization of debt settlement companies or the filing of bankruptcy.
It is up to you to determine what those better options are and seek them out “prior to” not after selecting to utilize debt relief or the filing of chapter 7 or 13 in bankruptcy court.
- Determine where you now stand financially
It is in “your best interests” to create a personal cash flow statement to see where you stand financially and determine if you have the monthly cash flow that allows you to create a plan to pay off or pay down your outstanding debt in a way that makes good financial sense.
By analyzing your inflows and outflows of cash on a monthly basis you can determine if you have the discretionary income that allows you to pay off or pay down your debt in a reasonable manner.
You don’t have to approach your credit and finances in a fearful manner or let worry anxiety and uncertainty rule the day inside of your mind on a daily basis, if you gain the knowledge that allows you to mentally reside in the right spaces!
- Determine the Best Approach to Take Based on Your Current Financial Position
Now that you know your monthly income and expenses you know if you need to cut expenses, get more income or do a combination of the two.
You may need to eliminate your cable or other monthly variable commitments for a period of time, get a second or better job, along with considering other options that allow you to cut expenses or get more income!
You may also need to do further analysis (if you are comfortable with numbers) by creating a personal income statement and a personal balance sheet so that you can determine your net worth at this time as your best option could be to sell assets or pay off or pay down certain liabilities to help free up income.
- Review What you Need to Do to Make Your Dreams Come True
Once you decide your approach, you must on occasion review how you are progressing and make adjustments when and where necessary.
You must get to the point where you are certain that debt payoff will occur and you must plan for and expect even more in your future. You want to get to a point where you CONTROL your finances and not allow your finances to control you ever again, in your future!
If you find yourself in the real position where debt settlement or the filing of bankruptcy appears to be your best option, you may want to get other opinions before choosing your path toward the financial improvement that you desire.
Your effective management of your credit is contingent upon you getting out in front of your credit management and determining if you can make improvements.
If you find yourself in a difficult or challenging credit position at this time–you still want to create a budget or cash flow statement so that you can determine if you have positive or negative cash flow. In order to improve your situation you may need to get more income, cut expenses or do a combination of the two.
It really is just that simple!
You want to do all of the above prior to responding to radio personalities or promotions, offers from debt settlement companies, attorneys, influencers on social media or other financial companies–as your first-step should not be to pursue them, but to do your own analysis and independent research upfront.
You may find that you have better options than consolidating multiple payments into one that many debt settlement companies promote or choosing among other financial options that may not be in your best interest!
You may find that you have better options than filing bankruptcy; however, you won’t know until you do the needed analysis yourself at this time!
Are you expecting a large financial windfall? Can your anticipated tax refund improve your current position in a way that will allow you to get back on track? Do you anticipate additional household income in the near future? Will you pay off debt and that payoff allows you to improve your cash flow significantly?
You want to look at all of the possible solutions to your debt payoff prior to–not after filing bankruptcy or seeking other adverse options!
You want to consider the effects that your choice will have on your credit and credit score in the short and long-term.
You also (if you have a need to) want to file bankruptcy prior to depleting your assets and particularly your retirement assets, as they are in many cases protected from creditors!
However, you may also find that you are unable to meet your debt payments in a reasonable payoff period (generally 12-48 months) and debt settlement and bankruptcy may have to be seriously considered and decided upon by you, your family and financial professionals.
If you decide not to do the analysis yourself, you want to at least get several opinions from financial professionals and you want to ensure that you have comprehensive exposure to your unique financial position at a given point in time.
All the best as you avoid turning your credit management into a real mess…
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