- Saturday, April 27, 2024
By: Eastern Eye Staff
You do have several options when it comes to debt relief. The right one for you depends on several factors including the severity of your problem and the kind of debt you have. Let’s look at those options and what to look for in a debt relief review.
Debt Relief Options
To rid yourself of crippling debt, you may be able to pursue options including debt consolidation, debt settlement, credit counseling, debt management, and as a last resort, bankruptcy. With these, it may be possible to get a lower interest rate or a reduced or forgiven balance.
What is Debt Consolidation?
Essentially, debt consolidation rolls multiple debts into a single payment through a personal loan or credit card, ideally with a lower interest rate. Bill paying is simpler since you have only one fixed monthly payment to deal with. This is as opposed to multiple payments of varying amounts and with different due dates.
What is Debt Settlement?
With this financial strategy, you’ll hire a debt settlement company to negotiate with your creditors to try to get them to resolve your balances for less than what you owe – usually around half. Rather than pay creditors directly, you’ll make monthly payments into a dedicated savings account from which settlement monies will ultimately be drawn.
What is Credit Counseling?
These organizations offer finance and debt advice, can help you establish a budget, and offer workshops and educational materials. Counselors are certified and trained in consumer credit, budgeting, and debt and money management. They also can help you organize a debt management plan. Read on.
What is Debt Management?
If you’re having problems making your payments, a credit counselor may advise you to enroll in a debt management plan. Such plans usually have you make a single monthly payment to the credit counseling organization, which disburses payments to your creditors. While such plans don’t reduce the amount you owe, they can get you a better payment schedule.
What is Bankruptcy?
A last-ditch strategy because a filing can stay on your credit report for up to 10 years, bankruptcy can clear or help you repay unmanageable debt. Chapter 7 is the most common type for individuals and calls for the sale of a debtor’s nonexempt property. That’s followed by Chapter 13, which lets a debtor repay at least part of their debt over a period of three to five years.
How Do I Know Which Option to Choose?
Ask yourself what type of debt you have. Is itunsecured debt – not attached to collateral – such as from credit cards, a medical bill, or a personal loan? Or do you have secured debt that’s tied to an asset such as a house or vehicle?
How Do I Know Which Company to Choose?
After you’ve settled on the best debt relief strategy for you, now you must find a good company or organization. If you’re considering bankruptcy, you need to speak with a lawyer who specializes in the legal process.
To make sure you’re getting a reputable company, go online and check out consumer testimonials and National Debt Relief reviews. You should also contact your state’s attorney general’s office and local Better Business Bureau to see if there have been complaints.
Be wary of any debt settlement company that seeks payment up front before it resolves any debts. Also steer clear of firms that aren’t forthcoming about licensing, accreditation, or risks involved.
And remember, no debt relief program can honestly “guarantee” that they can get your rates slashed or settle your debt. Creditors aren’t obliged to work with you, although they usually do because, well, they’d like something rather than nothing.
Now you know about your debt options and what to look for in a debt relief review. Get started today on your debt-free life.
