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Credit Card Debt Settlement – Fact or Fiction?

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rescue one financial credit card debt settlementIf you are one of the unfortunate individuals who have been struggling to meet your consumer debt obligations, there is a good chance you have been seeking solutions to your financial problems. If so, you have undoubtedly discovered the worse the debt situation gets, the more difficult it is to find relief.

Solutions for Desperate Situations
According to the US Bankruptcy Court system, 2.2 million individuals filed for bankruptcy over the two-year period ended October 31, 2014. Bankruptcy is the ultimate solution for severe consumer debt issues. If you have an average American household, you might be carrying $15,611 in credit card debt (Federal Reserve Survey, 2014), mortgage debt, a car loan and student loans. Depending on your income, you might also be getting close to seeking desperate measures to solve your problems. Before you start thinking about bankruptcy, you might want to consider the consequences, including 7-10 years of bad credit. As an alternative, you might have heard the term “debt settlement” and be wondering if it’s a viable option for relieving severe consumer debt issues.

Credit Card Debt Settlement – Fact or Fiction?
If you are curious about debt settlement, here is some information you might find interesting. Credit card debt settlement is a real and viable solution for people who find themselves stuck behind the eight-ball with unmanageable debt. It’s a fact, not fiction. However, the debt settlement process does come with consequences to go along with the benefits derived.

What is Debt Settlement
When a credit card borrower is no longer able to maintain regular payments, it is possible to approach your credit card companies about the possibility of renegotiating the debt balance as well as some of the key terms. You can initiate this process on your own, but it’s a far better option to work through a licensed debt management company that has experience dealing with such sensitive matters. If the negotiations are successful, there’s a strong possibility your debt will be deeply discounted, your effective interest rates lowered and lower monthly payments established. All of these adjustments would be based on your promise to resume regular payments on a timely basis. As mentioned, there are consequences. The biggest one would be the damage done to your credit score. It won’t be as severe as the damage caused by bankruptcy, but you best be prepared for 2-3 years of bad credit.

What About the Lenders?
It goes without saying lenders are never pleased about the debt settlement process. However, most lenders are run by astute business people who are able to understand the realities of the situation. If they refuse to negotiate, it might lead you to bankruptcy. Through the bankruptcy process, they might stand to get nothing in the settlement unless they are willing to incur excessive legal expenses for a fight. From a business standpoint, it makes sense to settle for what they can reasonably get through the debt settlement process.

Complicated debt settlement negotiations are best handled by professional debt counselors with the requisite experience. If you would like to discuss these or other matters with our counselors here at Rescue One Financial, they would be glad guide you through the process, which will help give you a new start and a chance to rebuild your credit score.

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3 Qualifying Factors For A Debt Consolidation Loan

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Debt Consolidation Loan QualificationAs debt and bills accumulate, there is a real possibility you will someday be confronted with debt issues that could put a material strain on your life and financial well-being. In America, people have gotten used to carrying high levels of consumer debt, more than they can justify based on their income. According to a Dec 2014 Federal Reserve study, the average American household has credit card debt of roughly $16,000 spread over an average of almost four credit cards. That represents a lot of debt and extra bills to be paid on a monthly basis.

Addressing Debt Issues
As the pressure builds, it makes sense for you to start looking for solutions. Before you start dealing with your current debt issues, you might want to consider lifestyle changes in order to prevent incurring more debt in the future. A good debt management strategy could be helpful with that endeavor. Once you feel your fiscal behavior has been adequately modified, you can start looking at your options for paying off existing debt. If you qualify, a debt consolidation loan is a great way to eliminate most of your bills while structuring your debt in a way that enables you to pay it off as quickly as possible.

3 Qualifying Factors For A Debt Consolidation Loan
Before considering what you need to do to qualify for a debt consolidation loan, it’s important for you to determine whether or not you can realistically handle your current debt levels. If not, there are more aggressive solutions available for eliminating debt. If you are serious about handling your responsibilities and saving your credit score, here are three important factors that will be used to determine whether or not you can qualify for this type of loan.

Steady Income – Whether you approach a conventional lender (bank, credit union) or a debt consolidation company, they are going to require proof of income. If you don’t have a steady stream of monthly income, you are going to find it very difficult if not impossible to find a company willing to take that kind of risk. Many of these lenders will also request some type of monthly budget showing income versus expenses.

Collateral – While collateral is not absolutely necessary, it serves to make qualifying for the loan an easier task. Qualifying collateral usually includes free and clear assets like a car or boat, household furnishings or personal assets like jewelry and stocks. If you offer up good collateral, you can keep your effective interest rate to a minimum. Without it, your interest rate will reflect the additional risk being taken by the lender.

Credit Score – When trying to qualify for a debt consolidation loan, most lenders are aware your credit score is probably not perfect. It doesn’t mean they are going to ignore it. Most lenders want to see a credit score in the “good” range or better. A few lenders might take the risk with an “average” credit score, but the effective interest rate is going to reflect the risk. With “bad” credit, you’re pretty much out of luck.

If you have questions or concerns about qualifying for a debt consolidation loan, our professional debt counselors here at Rescue One Financial can act as reliable resource for your questions. By working with our company, there is good chance a viable solution can be crafted that saves your credit score and enables you to reestablish financial security.

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How To Deal With Debt Relief Discouragement

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How To Deal With Debt Relief DiscouragementWith your back against a wall of debt, it must feel like the weight of the world is on your shoulders. It doesn’t matter how you got yourself into this position, it only matters that you find a way out. The truth is that it’s far too common for Americans to find themselves facing issues related to debt, particularly credit card debt.

Those facts are supported by the data recently provided by the Federal Reserve. By the end of 2014, Americans had total personal debt of $11.7 trillion. Of that number, there was credit card debt of $882.0 billion, approximately $16K per household. For 14.7% of those families, that number represented at least 40% of their annual income. Numbers like these are unsustainable, leaving too many people praying for a way out.

The Way Out
Depending on the severity of your own situation, there are ways to get the debt relief you need. If you need actual debt relief, debt management would only be useful in helping you learn how to better handle your finances. Debt consolidation might help if you have the means to make debt payments, but have too many bills with too much cash going out the door on a monthly basis. If your problems are reaching unmanageable status, you need to consider debt settlement as the next best solution. Of course, there are no guarantees your creditors will cooperate, so you need to be prepared to deal with the process.

How To Deal With Debt Relief Discouragement
By the time you start looking at debt settlement or even bankruptcy as an option, you might be feeling a bit discouraged. In fact, the debt settlement process stands to perpetuate those feelings of disappointment, leaving you more discouraged. In order to deal with escalating debt problems, you need to stay focused and motivated. Here are some tips on how to keep from feeling discouraged about the debt relief process.

Take Responsibility – If you debt problems were brought on by personal emergencies or tragedies, it’s not you fault and there’s no sense in languishing. If it was due to irresponsible spending behavior, take responsibility for you actions, make improvements and move forward.

Don’t Take Rejection Personally – This is hard to do, but lenders that say no to debt settlement are making business decisions, not proclaiming you a bad person.

There’s Help Available – Debt management companies and credit counselors are available to help you right your financial ship. Don’t be too proud to seek help.

Prepare for the Worse – In most cases, bankruptcy is the worse case scenario. If that’s where you end up, your credit will be damaged, but your debt slate will be clean, allowing you to move forward and start rebuilding.

Understand Consequences Are Not Permanent – None of the consequences of having debt issues are permanent. As long as you use debt management techniques to avoid future problems, everything will be fine at some point in the future.

Here at Rescue One Financial, our professional debt counselors specialize in helping people face and deal with personal debt issues. If you want or need assistance, please schedule an appointment as soon as possible. Working together, there’s a good chance we can find the right solution and put an end to those feelings of discouragement.

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Solve Money Woes with A Debt Consolidation Loan

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Rescue One Financial debt consolidationWhen you have a problem, it’s only a problem until you find the right solution and fix it. Excessive consumer and credit card debt is a problem for many people. It causes people to live with unbearable stress, which makes for an unsatisfying life. How many times do people say; “If only I could find a solution to my money problems?” Money woes are temporary as long as you understand there are ways to fix the problem.

The Real Story Behind Debt in America
If you are wondering why so many Americans have money woes, all you have to do is read about the facts as presented by the Federal Reserve in late 2014. Did you know that the average family was carrying $15,611 in credit card debt? For 14.7% of those families, that number represented at least 40% of their annual income. Furthermore, it seems to be debt that just doesn’t go away as 56% of those questioned stated that they had been carrying credit card balances for at least 12 months prior to that date. These numbers show you are not alone if you have money woes.

The Best Option for Problem Debt
With the average family using an average of 3.75 credit cards, the fact is they spend too much time worrying about debt. As the credit card balances rise and the ability to pay on time diminishes, the stress has nowhere to go but up. If you are standing in your boat and feel like you are taking on water, there is a viable solution that has helped many Americans set aside their financial worries. It is called Debt Consolidation.

Solving Money Woes with a Debt Consolidation Loan
First, you might want to consider contacting a debt management company that has experience with helping borrowers secure debt consolidation loans. There are four components related to credit cards bills that cause a majority of the problems and stress. They are:

  • High credit card balances
  • Too many monthly payments
  • High interest rates
  • High monthly payment requirements

In order to change the first component, you would have to consider more drastic options such as debt settlement or bankruptcy. Both are viable solutions, but each of them comes with uncomfortable consequences. Before taking such drastic measures, you should try a debt consolidation loan. If you are able to secure one, it offers the following benefits, which addresses the other three components.

  • Your number of monthly payments will be reduced to a single lender.
  • Your effective aggregate interest rate will most likely be lower than that being charged on your credit cards.
  • Lower interest rates should translate into a lower monthly payment, which puts more cash in your pocket for savings.

Here at Rescue One Financial, our professional debt counselors have a good deal of experience with helping clients secure debt consolidation loans. If you would like the opportunity to investigate whether or not it is a viable solution for your situation, you should schedule a consultation at your earliest convenience. The only thing you have to lose by doing so would be you stress and money worries.

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3 Common Credit Score Errors

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common credit score errorsFor better or worse, the most important number in your life aside from your social security number is your credit score. From the moment you make your first credit transaction, your credit score follows you wherever you go for the rest of your life. It gives major credit reporting agencies (Equifax, Experian and TransUnion) a lot of influence over you finances and ultimately, your life.

The Importance of Your Credit Score and Overall Rating
Your credit score is going to dictate whether or not creditors are willing to offer you credit. Without a good credit score, it’s virtually impossible to buy a home. You might be able to buy a car or qualify for a credit card, but a bad credit score might result in high interest rates and strict payment guidelines. Also, employers are now using credit information to determine whether or not applicants are worthy of the trust that would be bestowed on them. There is no escaping the reach of your credit rating.

The Role of Credit Reporting Agencies
You must keep in mind that credit reporting agencies have no vested interest in your situation one way or another. They simply provide a service that requires them to report financial facts about you as they know them. If there are problems or errors on your credit report, the source of the issues could result from faulty information provided by creditors or through input errors committed by the agencies. Either way, it’s ultimately your responsibility to make sure that all information on your credit report is accurate and factual.

3 Common Credit Score Errors
Credit reporting agencies are run by people and people make errors. Because of this inconvenient fact, it is important for you to review your credit report at least once a year. If errors appear, it’s easier to catch and correct them soon after they occur. The three most common errors to look for are:

1. Identity Errors – These types of errors range from nuisance to serious. The most common identity errors include name misspellings, wrong addresses and phone numbers, an incorrect birth date and an erroneous social security number. In a worst case scenario, some of these errors might cause someone else’s information to be reported as yours.

2. Account Information Errors – Most of these types of errors cause credit rating problems. Common account errors include wrong account numbers, incorrect credit limits, incorrect account status and erroneous account balances.

3. Fraud – This one is serious and often involves criminal activity on the part of someone who has stolen your identity. These criminals will use your personal information to secure credit, run up balances and disappear, leaving you and your creditor holding the bag. They require a lot of work to fix and often create adverse credit ratings that impair your ability to borrow on a temporary basis.

If you would like more information about protecting your credit score, you can contact one of our professional debt counselors here at Rescue One Financial. We can provide you with a list of common errors to watch for and assist you in getting them corrected. You don’t want to let credit reporting errors define your life any longer than necessary.

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How to Consolidate Your Debts Into One Payment

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Consolidate Your Debts Into One PaymentHave you ever seen someone open their wallet, only to expose a plethora of plastic? It’s quite amazing how many credit cards can be carried in a single wallet. Even more amazing is the number of people who are trying to pay the bills associated with all of those credit cards. By the time you consider they also pay rent/mortgage, utilities and other assorted bills, it seems like America is filled with an army of part-time accounts payable clerks.

Are You One of Those Accounts Payable Clerks?
If you are one of those clerks, you have no doubt experienced the stress and frustration that derives from being overwhelmed by consumer debt. It’s not a very good feeling and it often leads to unhappiness and depression. There is no point in getting down on yourself for being fiscally irresponsible, it happens. It has happened to 56% of the American families that reported carrying credit card balances for longer than 12 months (Federal Reserve Survey 2014). It has also happened to 15% of those same American families who had outstanding balances exceeding $10,000. You are not alone. Instead of fretting, maybe you should consider finding a way to relieve your financial woes.

How to Consolidate Your Debts Into One Payment
If your debt is unmanageable, you might have to consider options like debt settlement or bankruptcy and just accept the fact your credit is going to be damaged for a considerable period of time. Before you let it get that far, a debt consolidation loan might give you the relief you need. Debt consolidations loans come with several useful benefits that allow you to reorganize your finances into something more manageable without adversely affecting your credit rating. Before you jump in and try to handle the process on your own, you might be better served by working through a professional debt counselor who has the experience necessary to streamline the process. The primary benefits include:

1. A solitary Payment – Gone are the days of writing numerous checks. You will now write one check to one lender and your debt has been paid for the month. It makes reconciling your bank account easier to do.

2. Lower Aggregate Interest Rate – Credit cards carry notoriously high interest rates, especially for consumers with a less than perfect credit rating. With a debt consolidation loan, the interest is going to be more representative of current rates charged on personal loans.

3. Lower Monthly Payment – A by-product of having only one payment worth of principal and a lower interest rate is a lower monthly payment. The difference is often significant, which affords the borrower an opportunity to accelerate principal pay downs.

4. Maintaining Credit Rating – By agreeing to handle their responsibilities, borrowers can avoid the long-term negative effects on their credit score that are associated with other options such as bankruptcy.

At Rescue One Financial, our professional debt counselors work closely with clients to facilitate the securing of debt consolidation loans. If you would like more information or help with the process, you can schedule a consultation that should help give you the needed guidance as you work to fix your debt issues.

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How to go from Debt Consolidation to Debt-Free

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get debt-free with a debt consolidation loanIf you ever get tired of that eerie feeling you get when you open that mailbox knowing credit card bills await, you might interested to know there are people in America who experience the joy of living debt-free. It might seem like an alien concept given the fact that living with debt is commonplace in this country, but it happens.

The Problems Associated With Debt
Where to begin. Getting into debt is not something most people do willingly. Most of the time, American consumers use their credit cards and other forms of consumer debt with the intention of having it repaid within a designated period of time, no problem. Yes, problem. The best intentions don’t always lead to best actions. Otherwise, Americans would not have had $882 billion in credit card debt as of the end of 2014 (Federal Reserve). Furthermore, they would have never expected to find they were using 13.9% of their disposable income to pay down credit cards. Unfortunately, debt problems sneak up on people who are too optimistic about what they can afford and too unwilling to set reasonable spending limits.

Using Debt Consolidation
Right at the point that debt becomes a problem and before it becomes unmanageable, debt consolidation is a great way to reel in debt and start dealing with financial issues head-on. The objective should always be living debt-free. If you can cut up those cards and become a “cash and carry” consumer, it’s more than possible, it’s realistic. As for dealing with existing debt, debt consolidation is the best option. Through debt consolidation, you can roll all your monthly payments into a single payment to one lender. The extra benefits include a lower aggregate interest rate and a lower monthly payment that becomes a key component to becoming debt-free.

How to go from Debt Consolidation to Debt-Free
Once you have those credit cards in the dumpster and your debt consolidation loan in place, you can begin your march towards a stress free, debt-free and happier life. With a lower interest rate and a corresponding lower monthly payment, you are afforded the option of getting out of debt sooner rather than later. The first thing you need to focus on is getting in the habit of making your payments on time, all the time. With the extra money you’re saving on monthly payments, you always have the option of putting it into a savings account. However, you also have the option of taking that extra money and making extra payments against your debt consolidation loan. By doing so, you receive four primary benefits.

  • Your debt is eliminated sooner than you could have imagined.
  • Your financial stress suddenly disappears.
  • Your credit rating begins to improve, opening up financial options for the future.
  • Your get a great sense of accomplishment as you start living your life debt-free.

If living debt-free is something you would like to experience, our professional debt counselors here at Rescue One Financial can offer their experience in helping people just like you secure a debt consolidation loan. Once the loan is in place, they can also help you learn the art of living stress-free and debt-free in America.

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How to use Debt Consolidation To Pay For Medical Loan

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Debt Consolidation To Pay For Medical LoanIn today’s world of expensive technology, medical costs to patients continue climbing through the roof. While the ACA requires every American be covered by healthcare insurance, insurance coverage is having difficulty staying up with rising costs. The net effect is that patients and their family members are being saddled with out-of-pocket medical debt that often becomes problematic.

It’s important to remember how different medical debt is from other forms of debt. When someone gets in debt trouble because of credits cards, it is usually their fault for behaving irresponsibly. When someone secures a home loan and then defaults, there is a good chance they got in over their head or made mistakes that diminished their ability to service the debt. With medical debt, it’s unavoidable circumstances that created the debt 95% of the time.

Ways to Eliminate Medical Debt
For those unfortunate individuals who end up on the wrong end of medical debt, the effects can range from stress to devastation. Worse of all, the available methods for eliminating medical debt are limited. Of course, bankruptcy is always an option in severe cases as 62% of those who filed bankruptcy in 2007 can attest. However, bankruptcy comes with a set of undesirable consequences. If the debtor has an emergency fund or savings account, medical expenses would be a good way to use them. In a pinch, credit cards could be used when collectors become aggressive. While there may be several other ways methods for dealing with medical debt, the only other one that makes sense is debt consolidation.

How to use Debt Consolidation To Pay For Medical Loan
Before things get too bad, it might be a good idea for you to contact a debt management company about the pros and cons of debt consolidation. Debt consolidation loans can be secured or unsecured. Secured debt consolidation loans for medical debt are easier to get as long as you have adequate equity and a qualifying credit score. Otherwise, you might have to shoot for an unsecured debt consolidation loan that carries a higher interest rate. If approved, the medical debt is paid off directly by the lender and your payments are made to them.

Positives and Negatives of Debt Consolidation
On the positive side, a debt consolidation loan puts your debt in the hands of a professional lender. If issues arise, they tend to be a little less aggressive than medical billing collection agencies. Secondly, there is a chance the effective interest rate is going to be lower than the finance charges levied by hospitals and doctors, especially if the loan is secured. If this is true, your overall savings could be significant. On the negative side, these types of loans are difficult to qualify for if your credit score is marginal and you offer no security. Also, unsecured debt consolidation loans should be avoided if the interest rate end up higher than the related finance charges.

At Rescue One Financial, our professional debt counselors are well-versed on the positive and negative aspects of debt consolidation. If you would like to set up a consultation, you can contact us at your convenience. We will do everything in our power to help you find the right alternative, which should enable you to alleviate problems associated with medical debt.

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3 Reasons Debt Consolidation Loans Are The Simple Solution To Credit Card Debt

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rescue one financial credit card consolidationIf you have inadvertently gotten yourself into debt trouble by relying too heavily on credit cards, you are not alone. The reality is that Americans use credit cards as an everyday form of payment. Unfortunately, they don’t always pay off those credit cards as they had intended. According to the Federal Reserve from a recent survey, 56% of Americans admit to carrying a credit card balance over the prior twelve-month period.

Facts About Credit Card Debt
The Federal Reserve goes on to report that 60% of American households have an outstanding credit card balance of $1,000 or more. Of those households, 25% of them admit to over $10,000 in credit card debt. If almost 14% of their disposable income is being used to service this debt (as reported), it’s hard to imagine why more families aren’t experiencing moderate to severe debt problems. Of course, the longer that debt remains unchecked, the more likely families are to start needing help.

The Debt Consolidation Solution
No matter how bad your debt problems may seem, it’s not something you have to sit by and watch destroy your financial stability. The reality is that you do have options. If your debt situation has not yet reached totally unmanageable levels, you might stand to benefit from a debt consolidation loan. These types of loans are perfectly suited for individuals who seemingly have the means to handle their debt, but they just need a bit of relief from the rigors of dealing with bills and credit card companies. The three most basic reasons why debt consolidation loans provide such a simple solution are:

1. Immediate Relief to Debt Problems – If you qualify for a debt consolidation loan, some or all of your prior lenders are paid off with the proceeds. The late payments, late fees, collection calls and never-ending bills come to an immediate halt. You would be amazed at how fast this begins to relieve your anxiety and associated levels of stress.

2. Immediate Financial Benefits – As part of the debt consolidation process, your effective interest rate and monthly cash outlay will most likely improve rather significantly. As the debt stops accumulating and you stop hemorrhaging cash, your overall financial situation is most likely going to improve. With more available cash, you can avoid using credit cards in the future. Also, you will usually have enough financial flexibility to start accelerating debt payments in an effort to get out of debt sooner rather than later.

3. Minimizes the Effect on Your Credit Rating – The simplest way to save your credit rating when derogatory remarks start appearing is by paying off that associated debt. Once those lenders are satisfied, you can approach them about removing unwanted remarks, which dramatically helps repair your credit score with minimal effort.

At Rescue One Financial, our professional debt counselors stand at the ready to help you with your debt issues. If you would like more information or assistance regarding a debt consolidation loan, we are available to help you through the process and hopefully ease your debt-related stress and concerns.

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3 Reasons Why Medical Bankruptcy May not be A Good Idea

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Medical Bankruptcy May not be A Good Idea
You or a family member have just been through a serious medical situation that required hospitalization. Despite the fact you had medical coverage, your out-of-pocket medical expenses ended up being more than you felt you can handle, causing you immediate stress and threatening your financial stability.

Based on this scenario, you might be surprised to find out that you are one of a large population of people who are faced with a similar situation. According to a recent report filed by the Consumer Financial Protection Bureau, as many as 43,000,000 American families have outstanding medical bills. That number goes a long way in explaining why 62% of bankruptcy filings in 2007 were related to medical expenses. By the way, 80% of those individuals had some type of medical insurance.

The Culprit
When someone ends up in serious debt because of medical expenses, it’s nearly impossible to place blame. The patient didn’t get sick or injured on purpose. The insurance companies are usually clear about what and how much they cover. As for the medical facilities and doctors, it’s no secret that medical costs run very high. Too High? Most likely they are, but there isn’t much a patient can do about it. The truth is that no one is usually to blame for medical debt.

3 Reasons Why Medical Bankruptcy May not be A Good Idea
If your medical expenses are creating serious problems in your life, filing bankruptcy might be something you have or are currently considering. Before you initiate filing procedures, there are three reasons why that might not be a good idea.

1. Severe Damage to Your Credit Score – It is widely understood that bankruptcy severely damages your credit score. More importantly, your credit score becomes an albatross on your financial future for 7-10 years. During this time, you might have great difficulty securing a loan to purchase a home or a car. Ironically, you might also have difficulty securing credit to pay for additional future medical expenses. Another thing to remember is that many prospective employers are starting to use credit reports in evaluating a potential employee’s character and ability to handle responsibility.

2. Legal Fees and Court Fees – While trying to get relief from one kind of debt, you might find yourself incurring new debt in the form of court and legal fees associated with bankruptcy proceedings. You can try to handle everything yourself, but bankruptcy laws have become so complicated that you might need an attorney to protect your rights.

3. Possible Tax Liabilities – There are situations where debt discharged through Chapter 7 proceedings might be subject to income taxes. The IRS refers to this as Cancellation of Debt (COD) income. If applicable, you could be required to claim the amount of discharged debt as part of gross income, creating a tax liability at the effective tax rate.

If you are considering medical bankruptcy, you might want to consider contacting one of our professional debt counselors at Rescue One Financial. We have over 10 years of experience and we may be able to suggest ways to eliminate your medical debt and help you avoid the negative aspects of bankruptcy.