The money lending system is very complex and there are several laws and regulations that govern it. According to the law, the lenders, both traditional banks and private institutions, can formulate their own lending policy, of course within the peripheries of the state as well as the federal law.

According to the lender’s policy, you may not receive the amount that you request for. It will depend on your credit score and history which the law allows the lenders to procure from the different credit reporting bureaus if required. There are a few things to know about your credit report.

• According to the law no one can obtain it without your permission or tamper with it for their personal benefit.
• It is also possible that your credit report may differ between different credit reporting agencies and
• You cam always dispute any errors in it and ask for an explanation and rectification.

So much for getting your loan from a bank or any other private financial organization including sources such as nationaldebtrelief.com, now about the laws that governs the repayment aspect.

Lenders and creditors follow the law to the last word to determine how much you will have to repay them once you take out a loan for debt consolidation or for any other personal or business reasons. According to the law you must:

• Repay the amount you borrowed along with an additional amount called interest which is ideally the income or profit of the lenders
• The rate of interest will be as per the set limit by the law though the creditors can make a few amendments in it but can never cross the set limit
• The monthly amount to repay will be determined by the lender only though the law allows you to negotiate for lower rates and more favorable terms without any guarantee though.

When it comes to failing to repay your debt, the lenders will also act according to the law and the law itself can intervene if there is any variance in the repayment or collection process. The law is very specific about repayments and has specific set of rules both for the creditors as well as the debtors.

For a creditor the law states that if you fail to make the payment or fall behind the repayment schedule then the law allows the creditors to:

• Call you up and ask for payments
• Send your account to collections or even
• Sue you if required.

However, they cannot follow any unfair practices such as:

• Call you up at odd hours and at places not requested to
• Harass, abuse or threat you or any of your family member
• Pose as law enforcement of an attorney to misguide you to make payments and
• Cause mental harms.

On the other hand, if the creditor wins a lawsuit against you they have the right to attach your property or collateral, garner your wages or anything that is permissible by the law to collect the judgment.

As for the debtors the law allows them to find other alternatives to repay the debt and get relief from their stressful financial conditions. According to the law the debtors are allowed to:

Settle their debts with their creditors for a reduced amount:

• It can be paid one time in a lump sum or any other repayment method agreed. However, there is no guarantee that the creditor will always agree to your request.
• The law also allows the creditor to report this reduction to the credit bureaus and it will therefore hurt your credit score for at least seven years.
• You may take help of a professional debt settlement service and pay them for their service only when successful negotiation is made, an agreement is signed and at least one payment is made by you to the creditor.
• The law also allows Internal Revenue Service to charge tax on the amount forgiven.

Consolidate your multiple debts that will:

• Allow you to take a secured loan with collateral or an unsecured personal loan as well
• Allow you to reduce the number of loans that you have currently to one single loan
• Lower the monthly bills as these loans are offered at a lower rate of interest and for a longer period of time
• Reduce chances of any payment missed out as you will have to keep track of one single loan only.

Since debt consolidation does not reduce the total loan amount, it will not hurt your credit score or reflect in your credit history.

Lastly, you can also ask for money to repay your debt from your friends and family however there is no law that this should come with an interest or any set terms. However, to ensure that your relationship with the lender is not affected negatively, it is better to treat this as traditional loans and formulate a personal agreement between you two.

Finally filing for bankruptcy

Finally, if all other options are exhausted and other roads are closed and you are not willing to swallow you pride to ask your friend or relative for monetary assistance, you can also stay within the law and file for bankruptcy.

This bankruptcy may be a Chapter 7 or a Chapter 13 bankruptcy and the one you should choose will depend on your financial condition. It is best to find a bankruptcy lawyer in your area and consult about the options and way to go about filing bankruptcy.

However, be informed that filing for bankruptcy and availing it will affect your credit score and credit history severely. According to the law and depending on the type of bankruptcy, this negative aspect will stay in your credit history for ten long years. This means you will find it very difficult to take on any loan within these ten year period no matter how effectively and strongly you have built your credit.

Typically, bankruptcy should be your last option to avail. You must be okay with your damaged credit and will most mind liquidating your available assets in case of Chapter 7 bankruptcy.