When people become indebted, they can turn to debt solutions to eliminate their debts. Debt relief, also known as debt cancellation, can include partial or complete debt forgiveness and a slowing down or stop of the debt’s growth. Individuals, companies, and nations all owe debts. But what are the different kinds of debt solutions, and how do they work? What is debt relief, and how does it work?
Debt Solutions Management
One solution to getting out of debt is debt settlement, which involves negotiating with your creditor for a lower percentage of the total amount owed. Although this solution can work well, it can lead to a negative item on your credit, and you can miss payments. Besides, you can face hefty penalties and interest rates if you’re not diligent about making your payments. Fortunately, many states offer these programs for free.
Another popular type of debt solution is debt consolidation. This program can help you consolidate your multiple debts into one monthly payment. If your debts are more than $50,000, this can be problematic for you to pay through consolidation. Enrolling in a debt management program is a better option for people with higher debt amounts. Debt consolidation loans have a fixed term and can be paid off in as little as 60 payments. However, a debt management program can help people who owe over $100,000.
Debt solutions often involve partnering with a credit counseling agency. Through this program, you pay a specific amount to the agency, which distributes your payments to your creditors. These agencies maintain professional relationships with major credit card companies. In addition, most credit counseling agencies require their clients to close their credit card accounts, which helps them focus on paying off their debt.
You should consider hiring a professional to avoid debt consolidation and start a new life with lower payments. New Era Debt Solutions has attorneys on staff and a dedicated account management team. This firm handles all work in-house and never outsources work to unproven firms. It has helped clients settle over $275 million of debt. New Era Debt Solutions has a transparent fee structure. New Era does not charge monthly administration or upfront fees and only charges you if you successfully reduce your debts.
Another debt solution option is to work with a debt settlement company. Companies like InCharge Debt Solutions have over 1 million satisfied customers and have settled over $250 million worth of debt. In addition, they have a 97% Customer Satisfaction Rating. Legitimate firms work with you to reduce your debt and help you get back on your feet financially.
While Bankruptcy is an option, it isn’t the best debt solution for everyone. It damages your credit score and becomes a permanent public record. Also, bankruptcy cannot eliminate certain types of debt, and you’ll have to wait a minimum of eight years before filing again. Instead, debt solutions offer better payment terms for your unsecured debts. These may include lower interest rates and waived penalties.
Debt Solutions Summary
Debt solutions may sound appealing initially, but some significant drawbacks to consider before selecting a program. For starters, these plans can lower your credit score, and they often shut down accounts you may have. After completing a program, you may be able to reapply for credit, but you’ll have to start making payments on time and regularly. That’s why it’s always in your best interest to talk with a licensed professional about your options.