debt

Options for Debt Relief

These economic times are challenging to say the least. Many are struggling to pay their bills and are swallowed up in debt. There is debt relief assistance for those who are unable to meet all their financial obligations.

Debt settlement or debt negotiation is one option. This procedure involves negotiating with creditors to reduce the total amount of debt owed. A dollar amount to be paid off will be agreed upon between the credit card company and the customer. This amount can be between 35% and 75% less than the total amount owed. Consumers can negotiate with creditors or hire a debt settlement firm to negotiate for them.

Credit counseling may offer some financial relief. While this will not reduce you overall debt, a counselor can work with banks and credit card companies to have interest rates lowered on accounts. A counselor can also get payments adjusted to a more manageable level.

Debt consolidation is a popular option. This option replaces multiple payments with with one manageable payment. Debt consolidation does require taking out a loan to pay off debts. The loan has lower interest rates than credit cards so money will be saved. However, paying off the loan can take a long time.

If debts are too large, filing bankruptcy may be a the only viable choice. Chapter 13 bankruptcy requires some payments be made to creditors. Payments are made over a period of time–usually five years. Chapter 7 bankruptcy discharges all non-secured and credit card debt. However, with this filing status, assets are liquidated to pay off creditors.

Debt relief assistance is available for those who are struggling to pay bills. After financial needs are assessed, one or more of these options can be implemented to provide debt relief.

Posted By: 1 Stop Service