Your child wanted to buy a car and couldn't get approved alone. You decided to co-sign, saying you'd share the car. The total payment was $500 per month, and you both paid $250 of that. If your child then goes bankrupt, do you still have to pay for the debt, or is it all cleared since it was the same auto loan?
So you're looking into debt relief methods, such as bankruptcy. Not only do you want to get rid of the debt you have, but you want to take this time to really commit yourself to staying out of debt in the future. Some ways to do this include:
The phone rings, and you don't have the number saved. You pick it up anyway, even though you think it's a telemarketer, but you're surprised to find out they're not trying to sell you anything. They do want your money, though. The person claims to be with a collections agency, trying to collect on what you owe.
Getting out of debt sounds simple: Spend less money and pay off what you owe. Unfortunately, it's not always that simple, especially when dealing with significant levels of debt -- like medical debt that you may never earn enough to pay off. For more common, everyday debt, these are a few reasons people may not be able to shake it:
Debt consolidation scams usually look good at first, but they can force you into even greater debt -- perhaps with ballooning interest rates -- over time. They're a way to prey on people who are already having serious financial issues. However, there are ways to avoid them.
If you are buried under a lot of student debt, it is easy to think that a bankruptcy might be your way out of it. However, it is important to understand that bankruptcy filings can't fix everything. And in this case, bankruptcies are nearly impossible to utilize as a way to address your student debt. There have to be extreme circumstances for a student loan to be forgiven, and they usually involve the death of the debtor or a disability that dramatically affects their ability to work.
Dealing with creditors is something that no one wants to think about. Just the thought sends shivers down the spines of millions of Americans. The ceaseless phone calls; the endless letters; and the constant dread that you live with that at any given moment, you may be dealing with severe legal action or punitive financial consequences.
According to 2015 national statistics, the average U.S. household is carrying roughly $133,000 in debt. For households that have debt related to credit cards, auto loans, student loans and mortgage loans, here's a breakdown of the average household amount.
Credit card debt will always be a problem for people. But in America, this problem runs pretty deep with many people. According to recent data, the average American carries $3,600 in credit card debt. However, that is a vague statistic that leaves out a lot of other potential factors. For example, most Americans may carry credit card debt most of the time but they pay down their balance at the end of the month. There are also 60 percent of Americans who don't carry credit card debt at all.
One of the options that many people will discuss and be told about when they are in a difficult financial position is debt consolidation. This involves taking out a loan to cover all of your other debts. The problem with debt consolidation is that there are dangers that lurk in the details of this process.