Need to Pay Off Debt Faster? See How Much You Can Save with Your Free Debt Savings Estimate
Today, if you're like many Americans you may be going through a rough spot financially - as you try to get rid of debt, or pay off debt resulting from high interest, high balance credit cards, unemployment, staggering medical costs, or a personal hardship. For many consumers, credit cards have become a sort of lifeline, helping them purchase daily essentials until things start to look up...or until they realize that they have maxed out their credit cards and are no longer able to make payments, or can just pay minimums each month. There is some good news: If you are in a similar situation where you have been hit hard financially and are unable to pay off your debts, debt consolidation, debt management, or debt settlement may be able to help you get out of debt faster and save money. The fact is, there are a variety of options available to get rid of debt or payoff debt at an accelerated rate. Understanding how to get out of debt faster can, not only help to reduce stress, but also save a substantial amount of money as well
To look at the various ways to get out debt, payoff debts faster, or explore your debt relief options, request a free debt relief analysis and savings estimate - today. It only takes a few minutes online to get started.
Also known as debt consolidation, credit counseling usually involves combining, or "consolidating," all your debts into a single, more structured, and more affordable payment plan. While debt consolidation can be a good solution for many consumers, there are other debt relief options available, including debt settlement, which can significantly reduce the amount of money you owe to creditors. Both debt relief options have become, for many consumers, widely used alternatives to bankruptcy. While bankruptcy can also help clear credit card debts, it also has a more damaging and longer lasting impact to personal credit, so it might be a wise move to carefully review all your debt relief options before proceeding with a drastic option such as bankruptcy.
Advantages of Credit Counseling
Facilitated by credit counselors, debt consolidation typically begins with a personalized consultation (usually by phone) where they review your finances and outstanding obligations. After credit counselors determine how much money you can comfortably allocate to paying off your debts, they typically create a game plan and speak to your creditors asking for more lenient payment terms - such as reduced interest rates or the waiver of late fees or other penalties. Creditors that accept the proposals are then placed into the debt management plan, or DMP.
The goal is, when you have a more lenient and easier-to-manage payment plan, you can, it's hopefully, pay off or reduce your debts sooner than if you only continued to make the minimum payments at higher interest rates. For many consumers, having a simplified and more predictable payment plan is certainly preferable to having multiple, high-interest debts to manage and deal with every month.
Is Debt Settlement for You?
As a form of debt relief, debt settlement is a fundamentally different approach than debt consolidation through credit counseling. Unlike credit counseling where you pay off the entire amount of your debt - just at, it's hoped, lower interest rates - with debt settlement, you can try to negotiate, or "settle," with creditors for substantially less than what you owe. However, your credit score will typically decline because debt settlement involves "falling behind" on your credit card payments so that you can save funds to use to make a settlement or "lump sum" offer. When you skip payments, you are, essentially, defaulting on the terms of your credit card agreements and may face legal action from your creditors. However, in spite of the risks to your credit, debt settlement is still a popular alternative to bankruptcy - which has a more devastating and longer lasting impact on your credit.
Overwhelmed With Debts? You Have Options!
If you are overwhelmed with credit card and unsecured debts, you can breathe a little easier because you have several debt relief options available. Keep in mind that because every individual's debt situation is unique, it is a smart move to compare and contrast all your debt relief choices, and do your due diligence when selecting a company to work with. It may also be a good time to review your spending habits and lifestyle choices, and determine whether there are areas in your life where you can make small changes that can, potentially, add up to big savings later.
The bottom line is, there is help available for you if you want to take the next step in paying your debts off - such as debt consolidation or debt settlement. To see what debt relief can do for you or how much you can save, take a minute to answer a few, simple questions and get a free debt relief analysis along with a savings quote.
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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