When Credit Problems Become a Personal Financial Crisis

When Credit Problems Become a Personal Financial Crisis
By [http://ezinearticles.com/?expert=Trace_Morgan]Trace Morgan

Credit problems can happen to anyone. There are few of us who can go through life without facing a financial crisis of some kind. A temporary job layoff or loss of employment will often lead to a necessity to juggle the bills and escalate into late payments and high late fees. For families who barely make it from one paycheck to the next any disruption in income can rapidly become a struggle for financial survival.

If you are a good money manager, you may carefully put funds aside into savings and investments and feel you are insulated against losing your good credit or your possessions. Sadly, few of us are immune to credit problems.

In our current economy, even large businesses close their doors unexpectedly - leaving hundreds or thousands of employees suddenly jobless. Big corporations keep their profit margins constant in a bad market by reducing their work force and these job eliminations are just as likely to occur in the white collar management division as in the hourly worker area of the business. The CEO may get a Golden Parachute, but most workers are lucky to get a few weeks of severance pay.

Thinking about what "might" happen is enough to raise the blood pressure of anyone. An accident or illness requiring extensive medical care has destroyed the financial stability of many families. The very poor often have options available to them - the very rich have insurance resources most of us can't afford.

For those in the middle, one major health crisis can cost everything we have. Truth is, though we pay more for insurance than ever before, our coverage is often less than we realize. In an extended hospital stay or long term treatment, the high costs of medical care can easily exceed the payment limits on insurance coverage. The fear and worry over the illness of a loved one is too often followed by the emotional trauma of huge medical bills that can't be paid.

There is an ongoing argument among self-proclaimed experts concerning how many bankruptcy filings are due to medical expenses. The standard often quoted by government sources is approximately 50% while others argue it's only 30%. If you are one of those with thousands or tens of thousands - or more - due to hospitals, doctors, labs, treatment centers - does it really matter if you are one in three or one in two? Of course not.

If you have seen your job disappear in a downsizing of your employer, does it matter if the unemployment rate is 5% or 6%? No, it doesn't. It is a crisis that affects you. Bankruptcy is not the only alternative - and often not the best one. Whatever the reason for your credit problem, the only way to find a solution is to look at the problem directly. You may be able to arrange payments you can afford; you may be able to settle some of your debts for less than the amount owed.

Credit intervention by an accredited counseling agency may provide the help you need in a credit crisis or you may find that filing for personal bankruptcy is the only option that remains to you. The one thing that will not work is to ignore the debt. Acknowledging a credit problem is the first step in finding a solution.

Go to http://solvingcreditproblems.com to learn more about the options available to consumers with credit problems.
Author Trace Morgan specializes in providing consumer information on credit, loans, bad debt, foreclosure and bankruptcy recovery.

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