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Deal with your anxiety/insomnia/depression
If your financial issues cause you anxiety, depression or insomnia, deal with them as quickly as possible so they don't prevent you from getting your finances in order. Check solutions for anxiety, depression, and insomnia.
Make a list of all your debts and their interest rates
Make sure you even know how much you owe, to whom, and what is the interest rate of a certain loan, credit debt or anything else. When you have a clear picture of all your debts, it will be easier for you to decide your next step.
Debt settlement is one of the last options for getting rid of your debt as it will seriously damage your credit score. But, sometimes it is the best option for you. Basically, your creditors and you agree that you will pay a certain percentage of your debt and it will count as if you repaid your entire debt.
Before using this option, talk to your credit counselor to see if this is the best option for you.
It's not the most pleasant thing to do, but it certainly beats getting a high-interest loan from a bank or credit card company. Explain your situation to your friends and family and if needed, make an official agreement, with notary public present, so the person who lends you the money knows you are serious about repaying your debt to them. If needed, offer a collateral.
If your customers owe you a significant amount of money, and that's one of the main reason you're in debt, explain your situation to them and make them understand your business won't survive unless they pay what they owe you. Give them a discount if needed or an option to pay you in monthly installments. Anything that will get you some money.
The worst thing to do when you owe your suppliers or creditors is to hide from them and reject any kind of contact. It's hard to deal with upset creditors and suppliers, but it's something that has to be done. Explain your situation and try to reassure them. Reach some kind of a deal that will make your debt manageable.
If you hide from them, creditors might panic or get angry at you and sue you or sell your debt to a third party. Suppliers might cut you off, shutting down your production and making it impossible for you to get back on your feet. So no matter what, never stop communicating with people you owe to.
Chapter 7 is suitable for individual or businesses who have no other way to repay their debts except to liquidate their nonexempt property and proceed earnings to their creditors. Certain requirements have to be met for you to file for chapter 7. For more about chapter 7 and to see if you are eligible for it, visit uscourts.gov
Chapter 13 offers you a repayment plan that usually lasts from 3 to 5 years. It's suitable for individuals or small business owners who have steady incomes and are able to repay at least portion of the debt. For more information, visit uscourts.gov.