The process of dealing with financial problems is mostly about making the best
available choices. This book is organized into six parts, each part dealing
with different types of choices you may face. Each part of the book is further
divided into chapters which cover more specific issues.
Part I (Making the Right Choices, Chapters 1-5) covers
the different choices you will face when you cannot keep current on your debts.
Chapters One and Two help you reevaluate your budget and prioritize your debts.
The goal is to put you in a position to deal with your most pressing problems
first and to have as much money as possible available to meet those needs. This
book is not intended to second guess your choices about minor issues like what
groceries to buy but, rather, to point out some major areas where you can increase
your income or where savings may be possible.
Chapters Three and Four warn you about a number of unwise choices you may be
tempted to make to resolve your financial problems. Getting your financial house
in order is as much about avoiding the wrong choices as it is about picking
the right ones. If you cannot repay your debts, you may be tempted to refinance
them. This will mean that you replace your old debts with new ones. Chapter
Four provides advice about when to and when not to refinance existing debt,
including potential difficulties involved in refinancing and ways to avoid the
worst pitfalls. Chapter Five suggests some options for financial management
which may help you avoid costly problems in the market for financial services.
Because Chapters Three and Four explain the types of financial choices which
can increase your financial problems, Chapter Five is provided to recommend
alternatives.
Part II (Debt Collection, Your Credit Rating, Collection
Lawsuits and Credit Cards, Chapters 6-10) focuses on problems when you
are delinquent on "unsecured debt," those debts for which you have
not put up your home, car, or other property as collateral. Common examples
are credit cards, doctor and hospital bills, and charges with retailers.
Creditors' major techniques for collecting on such debt are debt collection
contacts, threats about your credit record, and, less frequently, collection
lawsuits. Part II provides strategies for dealing with all of these collection
techniques. Chapter Ten then offers some advice to help you make wise decisions
about credit cards.
Part III (Home Foreclosures, Chapters 11-14) deals
in depth with one of the most severe consequences of financial distress--the
potential loss of your home. If you have put up your home as collateral on a
loan, that lender can seize your home if you fall behind on your payments. Part
III explains the foreclosure process, tells you what steps you can take to avoid
foreclosure, and what you should do if foreclosure cannot be avoided.
Part IV (Evictions, Shutoffs, Repossessions, Seizure of
Tax Refunds, and Other Threats to Property, Chapters 15-19) covers your
best choices, both in the short term and the long term, to deal with other debts
that can threaten your property. Each chapter covers a different type of debt
problem that may lead to the immediate loss of property or essential services,
such as evictions, utility terminations, car repossessions, or government seizure
of a tax refund. The basic lesson of each chapter is that there are many things
you can do for almost every common consumer debt. For example, the student loan
chapter lists a number of special rights you have in dealing with your student
loan debt. Giving up is almost always the wrong choice.
Part V (Your Bankruptcy Rights, Chapter 20) provides
a brief overview of your bankruptcy options, which may make particular sense
for dealing with your long-term financial difficulties. Bankruptcy is your most
basic protection against unmanageable debt. The information in Part V is intended
to help you make the right choices about when bankruptcy relief makes sense.
Note that Congress is evaluating major changes to the bankruptcy laws. You
may want to consult a bankruptcy professional to find out whether these changes
were passed and, if so, whether they will affect your bankruptcy rights.
