Forms of Debt Relief
With the amount of debt relief options available to the average consumer, it has become easier to rid yourself of debt. However, the best way to know which forms of debt relief may be best for you is to educate yourself on the various forms available. Each of the multiple forms of debt relief has specific benefits and detriments. One linking factor of most forms of debt relief is to eliminate your debt. Here are the different forms of debt relief that might be of use to you.
Debt settlement is a type of debt relief that can potentially lessen the amount of debt you have, making a settlement easier to reach and saving you money. Debt settlement does not run your credit as a means of qualification. In most instances, the only requirement for most debt settlement companies is to have over a certain amount of debt. This form of debt relief can work over time (should you use a company) or instantaneously (should you negotiate a settlement on your own).
Bankruptcy is one of only forms of debt relief that can completely eliminate your debt without further financial obligation from you (aside from the filing fee for your lawyer). Regardless of the amount of debt you own, one bankruptcy filing can make it all go away. Many unsecured debts disappear within a few months of filing for bankruptcy. The main detriment (aside from the inability to deal with secured debts) is the negative impact bankruptcy has on your credit. It takes up to 10 years for a bankruptcy mark to be removed from your credit.
Debt consolidation is one of the forms of debt relief more suitable for those who can pay their debt off through regular means. Debt consolidation helps to reform many debts into one debt by way of a debt consolidation loan. This does not lower the amount of debt you have, but it does help if you have multiple debts. Those debts can be eliminated in their separate forms, ridding you of multiple late fees, interest rates and due dates. However, you will need to have the credit to obtain such a loan. The bigger the loan, the better your credit must be. Unless you were able to handle your debts beforehand, this may be one of the forms of debt relief you should pass on.
Credit counseling is one of the forms of debt relief that does not directly impact your debt. Rather, credit counseling helps to educate you on your debts and how you can go about eliminating them from your life. While credit counseling does nothing to lower or remove your debt, it does provide valuable information and, in many cases, for free. If you’re unsure of what you can do to handle your debt, a credit counselor can be a huge step in the right direction without spending money.