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Debt Relief Plan

When selecting a debt relief method, having the right plan is key. Your debt relief plan is just as important as having the right method. Not all debt relief plans fit seamlessly with any form of debt relief. Depending on your debt relief method, your debt relief plan may work or it may fail. Here are the more popular versions of debt relief available and how your plan may impact their effectiveness.


Debt Consolidation


Debt Consolidation allows you to pay off most, if not all, of your debts with one loan. This form of debt relief simply repurposes your debt. Instead of multiple debts, you only have one to worry about. Ideally, this would help you to keep your payments on schedule. With the proper payment plan, your debts could be kept under control. However, it is easy to land yourself in more debt than before.

In the process of getting a debt consolidation plan together, the important thing is to limit other forms of spending. A debt consolidation plan is only feasible if other spending is budgeted. Should you fail to change the behavior that caused the debt, you will end up with a greater amount. The more you spend, the greater the amount of debt you’ll end up in. Changing your monetary behavior is key to creating a successful debt relief plan for debt consolidation.


Debt Settlement


Settling your debts for less can help you save money while still eliminating debt. There are two ways to achieve debt settlement: alone or through a company. If you choose to settle your debts alone, you’ll need to produce a lump sum at the time of negotiation. A debt settlement company gives you the option to make monthly payments to the same ends. Working through a company would take longer, but it would result in the same conclusion.

A proper debt relief plan for debt settlement depends on which form of settlement you aim for. Settling your debt alone would require you to save a decent settlement. While it would be ideal to save as much as possible, knowing what your credit provider would settle at is beneficial as well. Speaking with your credit provider can help to clarify your settlement amount. With a company involved, a simple matter of making monthly payments is the only debt relief plan you need. Limiting other spending helps as well.


Credit Counseling


Debt relief planning is essential to getting the most use out of credit counseling. The point of a counselor is to teach you more about your debt. In addition, you learn more about your debt relief options as well. However, you counselor can only suggest certain plans of actions to you. Credit counseling doesn’t actively affect your debt, leaving the actions to you. Your decisions heavily impact whether your debt relief plan works.

Instead of being given a method and coupling it with a plan, credit counseling gives you multiple paths towards achieving the same goal. Your debt relief plan will be left up to what you make it out to be. There’s no other form of debt relief that allows you the freedom to choose how you handle your debts.




Widely known as the last resort in debt relief, bankruptcy is an extreme measure. Your debt relief plan would most likely take place well after your bankruptcy filing. Once you file for bankruptcy, your unsecured debts will all be eliminated. You will no longer be responsible for making anymore payments to the owning creditors. The impact to your credit score will be great, but the main benefit does more than any other form of debt relief.

After a bankruptcy filing, your debt relief plan can focus around repairing your finances. Having a bankruptcy on your record hinders your ability to apply for credit. However, there are some ways to begin to build your credit during a bankruptcy. Credit options like secured credit cards or secured loans can help to fix your credit.