What do I do if Credit Counseling Doesn’t Work?

For many Americans, credit counseling (or if you are in Canada, credit counselling), is a great strategy for dealing with overwhelming debt.  Credit counseling is a great solution for dealing with credit card and other high interest debt, because in most cases your credit counselor will negotiate a repayment plan with little or no interest.

But what can you do if you can’t repay your debt through credit counseling, even with little or no interest?

A debt consolidation loan is an option, but that probably only makes sense if you can consolidate your debt over a period of many years, since with a debt consolidation loan you will be paying interest (with credit counseling you pay little or no interest).

If credit counseling and debt consolidation are not possible, you may need to file a Chapter 13 Wage Earner Plan (if you are an American), or a consumer proposal (if you are a Canadian).   These plans are a way to repay some of your debt, while avoiding personal bankruptcy.  (For more information, Canadians should research personal bankruptcy, which for Americans is called Chapter 7 bankruptcy).

There are other alternatives to bankruptcy.  For example, here’s a report on How to Get Out of Debt Fast Without Filing Bankruptcy that offers practical tips on dealing with debt.  You do have options, so begin researching your options today.

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