Would you know if you were having credit problems or were in debt distress? Can you answer yes to any of the following questions?
Are you usually late with bill payments?
If you lost your job, would you have immediate financial difficulty?
Do you receive calls and letters from creditors about overdue bills?
Have you withdrawn money from your retirement account to pay current expenses?
Do you regularly use credit card cash advances to pay off other creditors?
Do you put off medical and dental visits because you can't afford them?
Do you always make the minimum payment on your credit cards?
If you've answered "yes" to any of these questions, you're probably in debt distress. What's more, this debt distress can ruin your credit history and restrict your chances for getting loans in the future.
Did you know that when you apply for a mortgage or vehicle loan, a missed $60 credit card payment from five years ago could get in your way? That's right, forgetting, or just not paying a bill within the last seven years could impact your credit report when you apply for a loan.
We have all seen the ads suggesting personal bankruptcy is the easiest answer to financial problems. However, this is usually not the case. Bankruptcy does not give you a "clean slate" financially. It has several negative repercussions including:
When you file for bankruptcy it can stay on your credit report for up to ten years.
You'll have trouble getting credit. Creditors seldom extend credit to someone who files bankruptcy. If they do, the rates are often astronomical.
You'll have trouble getting any type of loan including a car loan, mortgage, credit cards, education, personal, etc.
Bankruptcy costs everyone money. It is estimated that personal bankruptcies will cost the US economy nearly $41 billion this year. That is the equivalent of $400 for every US household.
Bankruptcy is not a "quick-fix" and should only be used as a last resort.
If you are having financial difficulties, and are considering bankruptcy, talk to us first. We have a number of ways to help including our Financial Wellness and Recovery Program.
While getting back on your feet financially is not an easy task, it can be done. DCU has a program available to all members called Financial Wellness and Recovery. If you are having any financial problems, whether you are having trouble making loan payments or you just need help budgeting, let us know. We can only help if we know your situation. Our main goal is to help our members before financial difficulty becomes more serious. Learn more about our Financial Wellness and Recovery Program.