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Debt Relief Services Available To You

By: Michael Millington

When looking to solve the problem of ever growing personal debt, it pays to know what your options are. There are multiple debt relief services in existence that can lead to the shared goal of debt elimination. However, each of these methods takes a different path to that goal. In order to know which path to take, you’d have to know the available debt relief services and what they offer. Here we will discuss the debt relief services you have to choose from, their benefits and detriments.

Debt Relief Services Available to You


As a debt relief service, bankruptcy can be the most effective action you can take against your debt. Bankruptcy can eliminate your debts in short order, ridding you of the financial obligation. This can be helpful if you have fallen well behind your ability to handle your debts on your own. Bankruptcy generally takes a few months to take effect, making it faster than most other debt relief services.

Unfortunately, bankruptcy can also be the most detrimental action you can take for your debt. Bankruptcy can decimate your credit rating in an instant. This (plus a bankruptcy mark on your record) can hinder you from being approved for new lines of credit. Bankruptcy can even prevent you from getting a new job or borrowing money from the bank.

Debt Settlement

One of the more subtle methods of debt relief, debt settlement doesn’t leave a mark on your credit like bankruptcy. Settling your debts will still see you paying them off, but you will save money on your overall debt should the settlement be successful. You can either attempt to settle your debts on your own or you can hire a debt settlement company to negotiate on your behalf. Debt settlement companies have established relationships with creditors and can be extremely beneficial in resolving your debts.

However, debt settlement does require you to stop paying your creditors. This can result in your creditors taking action against you to collect on your debt. Even if you decide to put your debt into the hands of a professional, your creditors are not obligated to negotiate a settlement. This can result in a lot of wasted time if your offer isn’t accepted. If your settlement is accepted, there’s a chance you might have to pay taxes on the settled amount.

Credit Counseling

Credit counseling can provide you with the information you need to formulate your own debt relief strategy. By assessing each of your debts, a counselor can advise you on how to deal with your finances. You can also ask as many questions about your debts as you want. Most credit counselors offer their services for free, so you don’t have to feel pressured into retaining their services. Should a counselor deem one of your debts to be more than you can handle, they might suggest a debt management plan. This can be one of the more helpful debt relief services as it involves your creditor as well.

Without the use of a DMP (debt management plan) though, credit counseling does nothing to affect your debt directly. Should you not follow a plan or not listen to your counselor, your debt will not go anywhere. Unlike other debt relief services, there is no incentive to complete the process. A massive amount of willpower is required to stay focused on eliminating debt. If you don’t decide to change your habits, there will be no benefit gained.

Debt Consolidation

Consolidating debt is a great way to organize your financial obligations. Having multiple debts combined into one obligation can help you save money in the long run and improve your credit. This is one of the more preferred debt relief services due to its ease of use and quick execution. But the main problem with debt consolidation is that you need to qualify for the loan in the first place. If your credit isn’t good enough, you might end up stuck with a loan with high interest fees. Worst of all, you might not get a loan at all. Also, debt consolidation doesn’t eliminate or lessen your debt. Your debt is simply moved from multiple spots into one spot. If you couldn’t afford to pay your debt before, this change won’t help you.