Eliminate Debt: How To Get Debt Relief
Debt relief encompasses many forms to meet the needs of anyone who has debt. There are multiple ways to reach the goal of eliminating debt. Not all forms of debt relief are meant for everyone, however, and only some have the ability to work for certain types of debt. In some cases, some forms of debt relief might end up doing more harm than good. It is best to know as much as you can before making a decision to stick with one form of debt relief. The more information you have, the better your chances to eliminate debt.
Making Self Payments To Eliminate Debt
One of the more common ways to eliminate debt, self-payments is the act of making your monthly or bulk payments without professional assistance. Taking the initiative to tackle your debt yourself requires a lot of discipline and planning. There are many debts that can be completely eliminated through this manner. Some types of credit (like lower balance credit cards or payday loans) can be resolved through proper budgeting and steady payments.
The major difference between this and other forms of debt relief is the amount of work you must do to eliminate debt. Although it is entirely possible to negotiate terms with your creditors, they are not obligated to agree to anything. It can be stressful to be in direct contact with your lenders. While some remain unfazed with the interaction, many others find comfort in having a professional debt relief company handle the negotiations.
Many Americans remain unaware and unknowledgeable of the ways they can achieve debt relief for themselves. Unless you possess a working knowledge of how to barter with your credit providers, it might be better to leave debt relief to the professionals. Debt relief companies possess the knowledge necessary to protect your best interests. They also work closely with creditors to help have an edge in negotiations. Getting professional help might result in a better conclusion for you. There are many ways to seek professional debt relief services.
Seeking Credit Counseling To Eliminate Debt
Credit counseling is the act of garnering professional help to discuss your finances and come up with a plan to eliminate your debt. Many credit counseling providers can be found online and are run by nonprofits. The purpose of credit counseling is to determine what you can handle financially to achieve debt freedom.
If you carry a large amount of debt, your credit counselor might recommend a debt management plan. A debt management plan works almost like a debt settlement program. In this plan, your credit counselor would determine what you can pay towards your debt (based on your finances) and then negotiate with your creditors. Unlike with a debt settlement program, these negotiations can be for a longer payment term or for lower interest rates.
If your creditors agree to negotiate, you would begin making your payments to your credit counselor instead of your lenders. You would make a monthly payment to your credit counselor who would then disperse the money to your various creditors as per the debt management plan. While this will prevent things like debt collection calls from happening, it is widely accepted that this form of debt relief will take an exceeding long time to culminate. Many cases typically take around five years to finish. Plus, any credit cards that are attached to the debt management plan have to be cancelled.
Other Methods To Eliminate Debt
In some instances, debt consolidation might be a plausible solution. Debt consolidation is the act of putting all of your debts into one account. This is normally achieved by utilizing one large loan from a bank, credit union or other lending source. The basic idea of debt consolidation is to have a much lower monthly payment as opposed to the sum of the debts combined. Once consolidated, the benefits reside in the lower monthly payment and, generally, a lower interest rate to deal with. The main downside to this form of debt relief is the length of time it would take to achieve debt freedom. Another potential problem would involve the discipline needed to maintain these payments without creating more debt. The reward can be great, but the risk can be just as big.
Bankruptcy is a form of debt relief that is widely considered to be a last resort. This is because of the effect bankruptcy can have on your credit report. One of the immediate benefits of bankruptcy is that it can eliminate debts without the need to pay them off. Filing for chapter 7 bankruptcy allows for the liquidation of your personal assets to help pay off your creditors. In the event you do not have enough assets, any assets at all, or you just have exempt assets (like your house or car) then you can eliminate debt through discharge without giving up much.
Filing for a chapter 13 bankruptcy is slightly different than a chapter 7 bankruptcy. A chapter 13 bankruptcy involves a restructuring of your debt to create a more manageable method of paying back your creditors. If you have the means to make payments and you don’t want to run the risk of having any assets taken away from you, then this form of debt relief might appeal to you. However, filing for bankruptcy can be extremely detrimental to your credit as it stays on for 7 – 10 years. This can make getting new forms of credit exceedingly difficult within that time frame. While the benefit can be great, the drawback will always be the same with bankruptcy.
If you are looking to eliminate debt, there are many methods to choose from. Debt settlement, however, is the only method that can result in you paying less overall money to your debts in a shorter time frame than most debt relief options. With a much smaller impact than a bankruptcy and a faster result than a consolidation, debt settlement can resolve debt issues and result in a fresh start for many. Guardian Debt Relief has been providing that fresh start for thousands of Americans. If you would like to know more about how debt settlement can help you achieve debt freedom, don’t hesitate to contact one of our debt relief specialists. Take the first step to eliminate debt and contact Guardian Debt Relief today.