When credit cards and other debts have grown to be overwhelming for an individual or family to handle, there are several debt relief options available to help you get out of debt and save money in the process. For many people debt mediation may be the option that best meets your needs.
Know Your Options
While the debt relief center does not provide direct debt relief services, we can connect you to debt relief companies who can assess your situation and assist you.
Debt Relief Options
Debt mediation is a form of debt negotiation or debt settlement, but debt mediation typically involves a very large amount of credit card or other unsecured debt. For this reason debt mediation may be handled by an attorney or law firm that specializes in working on your behalf to negotiate debt settlements for you. Debt management is another debt relief option that may help you pay back all of your debt, but at a lower interest rate. This could help you get out of debt much faster than you could on your own if you were to pay off your debt at the higher interest rates.
Explore your debt relief options. Request a free debt relief estimate and savings analysis, at no obligation to you.
Credit Card Debt Relief
In some cases debt mediation allows consumers to payoff consumer credit card debt for much less than the full amount owed. Debt mediation may be the right debt relief option for you, but it's important to note that, at first, debt mediation may cause your credit rating to decline. However, once your debts are noted as "paid in full", and you reestablish a clean record of timely payments, your credit could begin to improve.
Professional debt mediation services can help you get out of debt in a relatively short period of time, often 3-5 years, and save you a substantial amount of money. While it can temporarily affect your credit report, it is not likely to have the same long-lasting affect on your credit report as a personal bankruptcy.
Choosing the Best Debt Relief Option
If you're in debt, it's important to remember that you aren't alone. Regardless of your debt situation and the debt option that best meets your needs, professional help is available! Start now by taking a moment to list the type of debts you have and the amount owed, and the Debt Relief Center will connect you to companies who can provide you with a free debt relief analysis and savings estimate at no obligation.
Debt consolidation is a debt relief option allowing individuals to combine or "consolidate" multiple higher-interest credit card, or other unsecured debts (such as medical bills, store or gas cards) into a single, more affordable payment each month. Typically, debt consolidation programs are coordinated by debt counselors who customize a "debt management plan" providing consumers with a proven and predictable path to get out of debt.
Summary: What to Expect
If you have multiple credit cards and other unsecured debts like medical bills, doctor bills, store cards, unsecured personal loans, and more – a debt consolidation program coordinated through a debt counselor may be the ideal debt relief option to help you live within a set budget, reduce debts, and get on a path to become debt-free.
How do debt consolidation programs, or debt management plans work?
Typically, debt consolidation programs are coordinated by debt relief specialists, or debt counselors, who conduct brief interviews with you to get details on your credit cards and other debts, as well as how much you can realistically afford to pay each month to get out of debt.
Based on this information, your debt specialist will then customize a "debt management plan" for you. Once you approve the plan, letters will be sent on your behalf to each of your creditors requesting the benefits of debt relief – such as lower interest rates, a waiving of late fees and penalties, and generally more favorable repayment terms. Those creditors who accept the proposals are then added to the debt consolidation or debt management program. For those that do not accept debt relief proposals, you are still obligated to live up to the original terms of your cardholder agreement.
It's important to understand that, just as no two debt situations are exactly alike, no single debt solution is right for everyone. Your debt specialist can provide more details regarding debt consolidation or debt management as part of your free debt relief analysis and savings estimate.
Debt settlement is a debt relief option that has become increasingly popular among people who need relief from high-balance credit cards (typically $20,000 to $125,000 or more). Through debt settlement, debt specialists negotiate with creditors on your behalf – with the goal of "settling" your credit card debt for substantially less than you currently owe.
Summary: What to Expect
If you have one or more high-balance credit cards and are going through financial hardship – credit card companies may agree to "settle" your credit card debt for substantially less than you currently owe.
How does debt settlement work? A debt relief specialist will review your current credit card debts and the amount of money you can afford to set aside each month to accumulate a "settlement fund". Debt specialists will then negotiate with credit card companies on your behalf with the goal of settling debt for substantially less than you currently owe.
How much debt settlement could potentially save depends largely on the amount of credit card debt involved, your current financial circumstances – and the settlement policies of credit card companies.
It's important to understand that, just as no two debt situations are exactly alike, no single debt solution is right for everyone. Your debt specialist can provide more details regarding debt settlement or debt negotiation as part of your free debt relief analysis and savings estimate.
There are many well-respected self-help credit and debt experts who provide a wealth of valuable advice on the wise use of credit and how to become debt free – experts such as Dave Ramsey, Suzie Orman, Clark Howard, and many others. But regardless of the system you follow – the first step in a successful do-it-yourself debt relief program is to do everything possible to live within your means – avoiding unnecessary "impulse" purchases that cause debts to spiral out-of-control. By creating and maintaining a realistic budget, you will avoid taking on additional debt.
In addition, you can take steps on your own to reduce existing debt by contacting creditors directly to request more favorable interest rates or terms, or offer to settle debt for less than the full amount owed.
The bottom line: If you have high-interest credit cards and other debts and are struggling to make ends meet – you are in need of debt relief. Whether you take advantage of a debt relief program such as debt consolidation or debt settlement, or commit yourself to take control of your finances and negotiate with creditors on your own – take positive steps today to get on the path to become debt-free.
7 Important Debt Relief Tips
- Create a realistic spending plan – a personal or family budget
- Set aside money each month to pay down your existing debt
- Stick with your plan. Avoid unnecessary "impulse" purchases
- Contact your creditors requesting lower interest rates or to settle debt
- Pay down debts one-by-one, starting with highest-interest debt
- Don't use credit cards! Use a debit card to stay on track
- Avoid taking out additional loans that add to your debt load
Bankruptcy is generally considered to be the debt relief option of last resort. There are several types of bankruptcy: Chapter 7 (straight bankruptcy or liquidation), Chapter 13 (reorganization of debts), and Chapter 11 (debt reorganization normally used by a business or partnership). While a successful bankruptcy can provide a fresh financial start – individuals or businesses should carefully consider bankruptcy before proceeding because of its long-term financial implications.
While bankruptcy is a debt relief option that has been able to provide a fresh start for many individuals, families, and businesses – it is a serious decision that should be carefully considered with the assistance of a financial advisor or attorney who can help determine if bankruptcy is the proper course of action.
Prior to 2005, those filing bankruptcy could choose the type of bankruptcy they preferred – and most elected to file Chapter 7 straight bankruptcy (liquidation) over Chapter 13 (structured repayment). However, rules enacted in 2005 now requires those filing Chapter 7 to pass a "means test" – to qualify, they must earn equal to or less than the average monthly income for a family of their size in their state.
In addition, before you can file for Chapter 7 or Chapter 13 bankruptcy, you are now required to complete credit counseling with an agency that has been approved by the United States Trustee's office.
While bankruptcy plays a vital role to help rescue individuals and businesses, it is important to recognize that it's not the only debt relief option. A debt specialist can provide more details on debt relief alternatives to bankruptcy as part of your free debt relief analysis and savings estimate.
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