When You Need to Look for a Debt Relief Option
You must keep in mind that debt relief actually don’t happen overnight. This is certainly a long process and such is not pain-free too. When you can repay those debts that you have through changing your spending habits, then this must be your first option.
When you think that you are able to repay the unsecured debt in 5 years, then you have to do this. You must reach out to those creditors for the repayment plans or consolidate the debt or have your budget restructured. But, if you have exhausted the different options for repayment and you are hopeless when it comes to repaying such unsecured debt in the future, then bankruptcy can be your option. You should also opt for this when the total balance of the unpaid debt is equals half of the income. However, when there isn’t hope in these solutions, then there are other options.
Credit counseling is an option which you can have now. The Credit Card Act of 2009 needs the credit card companies to publish that toll-free number for such consumers who require credit counseling help. The different credit counseling agencies would go through the debt as well as the income and they are going to give you an option of debt consolidation and debt management plan. There are some organizations having agreements with the creditors to minimize the interest rate on the debts. They are going to work to help you select a solution which really works best for the budget that you have. However, you don’t need to always agree to the plan. You can actually take the advice of the counselor and the suggestions and simply try this on your own.
Such credit consolidation is a solution which the credit counselor will suggest. With this, you can have a loan so that you can pay off all the unsecured debts. Well, the objective of this is to have one low-interest rate loan instead of having many debts. With this, you will just be paying one creditor now instead of paying five creditors each month.
Understand that debt management is also another option which is suggested by the credit counselors. The goal would be to eliminate the debt through reducing the interest rate as well as fees. You must have that more manageable lower monthly payment in this. The debt management programs are able to help you keep the credit score intact.
The debt settlement program is also a popular option since the lender agrees to accept less than what you owe. You should pay one lump sum in order to settle the unsecured debt. There is no need for you to get a loan.
But, of the different debt relief programs, you should know that bankruptcy is really damaging. You may get financial relief from such but there can be serious consequences. So that you can have a better understanding of this option, then you should research more and get more info.
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