Credit Score: Coping With A Credit Crisis

Avoid Bankruptcy and Free Your Debt . Get Refinance Loans , Secured Debt Consolidation or Debt Settlement Advices.
Credit Score: Coping With A Credit Crisis

A credit crisis, being unable to manage your debts, can come on slowly as the result of overspending for many years. The balances on your accounts grow and grow; pretty soon you’ve able to make only the minimum payments, and then not even that.

Other times a credit crisis comes at you in a rush as a result of another financial setback, a job loss, a divorce, a major illness. Suddenly, you have more “outgo” than “income”, and you’re not sure where to turn.

A friend I’ll call Charlie experienced a crisis that resulted from a combination of both forces. For years, he’d make a successful living as an animator, earning as much as a quarter million dollars a year. He and his family didn’t have to worry much about money, because so much was flowing their way.

Like hundreds of others in his field, though, he was caught in the industry’s downturn at the beginning of the millennium. By the time he contacted me, he had been unemployed for more than a year.

His primary concern was how he could get his home refinanced so that he could lower his interest rate and reduce his monthly expenses. Among the problems, though, was that he and his wife had pretty mediocre credit scores, and, of course, very little income, just what he could scrape together from occasional freelance gigs.

The steps you need to take are fairly straightforward:
1. Figure out how to free up some cash: You might not need to tap every source of income you identify, but it’s good to know what’s available before you go any further.
2. Evaluate your options: If you find enough cash, you might be able to set up a repayment plan and put the crisis behind you. If you don’t, you have an array of tough but important choices you’ll need to consider.
3. Choose a path and take action: You might not like all the consequences you’ll have to face, but further delay will simply make matters worse. The quicker you pick a plan and get started, the sooner your credit can start to recover.

Your Credit Score Liz Pulliam Weston

Credit Score: Coping With A Credit Crisis

Avoid Bankruptcy and Free Your Debt . Get Refinance Loans , Secured Debt Consolidation or Debt Settlement Advices.