It is not hard to fall behind on bills. Most people you know have probably done so at some point in their life; it is common and can happen to anyone at any time.
When people fall behind on their bills, often they turn to their family for help. While this may be a good solution for a small amount of debt, debt you can pay back in a month or two, it is not a good solution for large amounts of money that will take you a long time to pay back. Your family may want to help you with your financial problem by lending you money. They may even insist that you accept their money to help you get out of debt; however, this is never a good idea.
Borrowing Money From Family Can Cause Problems
When you experience an emergency and you need money quickly, borrowing money from a bank or other source may take too long. If you have had financial problems for some time, your credit rating may prevent you from borrowing money from a bank. If you turn to a finance company or payday advance company, you will likely be charged a high interest rate on the money you borrow making it more difficult to pay the loan back. For these reasons, it may sound like a good idea to borrow money from family members; however, this can create more problems than it solves.
When you borrow money from family members, everything may be fine for a while; however, the “loan” can cause tension between you and your family members if you are unable to repay the money. You may intend to pay the money back to your family member in a timely manner, but your financial problems prevent you from doing so. The longer it takes you to pay back the money, the more it can affect your relationship with your family member.
Another problem with borrowing money from a family member is the financial burden lending money to you could create for your family member. Because they want to help you, he or she may not tell you the truth about whether loaning you money will create a financial burden for him or her. The longer it takes you to pay back your family member, the worse the financial burden may become. You could potentially be putting your family member’s financial well-being at risk while trying to save your own.
A Better Way to Deal with Financial Problems
If you are in a spot where you think you need to borrow money to pay off your debts, seek the help of an experienced bankruptcy attorney. In many cases, borrowing money when you are in financial trouble only makes the problem worse by creating another debt that you cannot afford to pay. Debt consolidation loans do not address the real problem – you do not have sufficient income to cover your debts and living expenses. Using a debt consolidation company is another way to deal with a financial problem; however, these companies often charge high fees and cannot guarantee that your creditors will cooperate.
Filing a bankruptcy case addresses the root of the problem. By getting rid of your debt, you can get back on your feet financially without creditors putting pressure on you to pay your debts. A bankruptcy case is designed to give you a “fresh start” to recover and rebuild after a financial crisis. The bankruptcy filing protects your assets while discharging most, if not all, of your debts.
If you file a Chapter 7 bankruptcy case, your case will be completed within four to six months after the filing date with very few exceptions. You will not need to worry about paying back your family member or struggling to pay debts that you cannot afford. Bankruptcy is an affordable solution to your debt problem that does not require you to involve your family members and possibly create a financial burden for them. For more information on other debt solutions, download our Debt Solutions 101 eBook.
