Debt Relief Solutions That Could Work for You

It is easy to turn a blind eye and ignore debts as they mount and pile up. It’s a common occurrence, and while it is easy to ignore those debts for a while, eventually they will need to be resolved. Here are four debt relief solutions that can help you put your debt unrest to ease once and for all.

Debt Settlement -  This is an ideal solution for unsecured debts such as credit cards and medical bills. Via this approach, a debt arbitrator will negotiate with your creditors to reduce the total amount of money that you owe. This has the advantage of not only lowering your payments, but it can also shorten the duration of your payment term to between 12 and 36 months.

Debt Consolidation - Making multiple payments each month is full of pitfalls. For one, your interest rates and payment dates can vary widely; this can lead to missed payments and fee accumulation. Debt consolidation takes all of your debts and combines them together at a lower, fixed rate that won’t change. Further, since your debts are combined, you only need to make one payment each month.



Credit Counseling - Interest rates can eat up a significant portion of your monthly payments. Credit counseling can lower your interest rates, but it won’t reduce the total amount of money you owe. One drawback of selecting credit counseling is that any assistance you receive from a credit counseling company will show up on your credit report and lower your credit score. Thus, it is an option that you should weigh very carefully before deciding upon.

Chapter 7 Bankruptcy – This is a last resort option that we strongly caution our clients against. It has significant credit consequences and should only be chosen when the sum of money owed on credit cards and other unsecured debts is simply too much to ever be paid back. Declaring Chapter 7 Bankruptcy is a choice that should only be exercised when all other options and solutions have been thoroughly explored and exhausted.

There are a number of debt relief solutions that Superior Debt Relief can assist you with. We invite you to contact us by calling 866-896-7616. Our IAPDA certified arbitrators will be happy to help you navigate the solutions that can help you find proper financial footing.

Do Debt Consolidation and Settlement Programs Work?

Obviously, there are options for debt relief besides the drastic action of filing bankruptcy. Settlement is one of the most practical debt relief methods available. When done correctly, a settlement program can reduce your unsecured debt by 50% or more. While it is possible to pursue negotiations yourself, the process usually begins with enrollment in a debt settlement company.

Upon enrollment in a consolidation program, you will save up your disposable income in a savings or “special purpose account”. As the money in your account begins to accumulate, the company you enrolled with will negotiate with one of your creditors at a time to agree to pay off amount that is less than that of your original debt. Once your account has grown to the agreed upon amount, they are paid and your account is considered closed and no further payments will be due.

The process then repeats with each of your other creditors until all have been paid. It may seem against intuition that creditors would accept payment that is less than the full amount they are owed, but in reality it makes a great deal of sense. After all, if a creditor turns down a proposed settlement, and the borrower files bankruptcy, his or her creditors often receive none of the money they had been owed. Obviously, it is in a creditor’s best interest to receive a partial payment rather than nothing at all.

A word of caution here: trying to settle debts yourself can be very difficult. Credit card companies are often reluctant to negotiate directly with the debtor and they may even tell you that they don't do settlements under any circumstances. This is generally a boldface lie, but they would rather continue to try to intimidate you as long as they are dealing with only you. When your account goes to a settlement company, they realize that you have someone on your side and they will no longer be able to intimidate you with threats.

Get Out Of The Red And Live Financially Free With Our Services

Furthermore, if you opt for a settlement program, they will now accept the seriousness of your financial situation and recognize that collecting nothing on the debts you owe is a genuine risk. But one of the greatest incentives for them to settle - at years end, they can write off the amount not collected on your accounts towards their taxes. It's a game where they cannot truly lose money... the worst they can ever do is break even.

Superior Debt Relief is a Debt Relief agency. Our Debt Settlement Company works on your behalf to secure debt-free living with a number of services, including: Credit Card Debt Relief, Debt Consolidation Program, Debt Negotiation, Debt Management Benefits and Consumer Credit Counseling Service.

Debt Relief

 

Being deep in debt is a very stressful situation – especially if what you owe is more than what you are earning every month. Any breadwinner in the family feels this burden day in and day out. The pressure to make sure that the family is provided for is frustrating. While paying for the usual bills, you need to make sure your debts are paid on time and correctly. Not to mention having extra to put aside so you have emergency money for unexpected situations.

5 Different Ways to Achieve Debt Relief

It may seem like a very bleak moment but thankfully, there are options for you to weather out this financial crisis.

Self Payment Initiative

Before anything else, we’d like you to know that you have the option to fix everything yourself. While it is not guaranteed success as you have proven that you are unable to manage your finances, this could be worth a try. The good thing about this is you will not be burdened with the additional costs of hiring someone to help you out. All your funds can concentrate on paying off your debts.

You need to start off with a budget plan so you know just how much you debt you have and your ability to pay them off. Also, it will provide you with a black and white scenario of your financial standing. Next step is to call your creditors to tell them about your situation. Be prepared to show documents to prove that your claims are true. If they believe you, then you can discuss the possible options for you to be able to meet your debt obligations.

This is the ideal scenario of course. Unfortunately, the average American is unable to do this on their own because they simply do not know what to do. Even if you enlist the help of a free credit consultant, the expertise and professionalism required to negotiate for a new payment term is best left in the hands of those who know how. Otherwise, the desired results may not be achieved.

Thus let us examine your options on hiring a professional to help with your financial woes.

Debt Management

This is a program of credit counseling services for troubled credit card holders. These agencies have branched off to the private sector but at least you know that there are cheaper alternatives. Debt management agencies will help you analyze your financial standing, determine how much you can pay, and will negotiate with the creditors on your behalf. The negotiation can be on longer terms or lower monthly amounts – whatever is necessary for you to afford payments. Instead of paying the creditors directly, you will be paying the debt management agency and they will distribute the funds accordingly.

The benefit of going for this type of debt relief option is the possibility of lowered interest rates and monthly payments, waived penalty charges and other fees. Most of all, you will no longer be harassed by your creditors as they will be coursing everything through the debt management agency.

Consolidation Programs

Another option is consolidating your debts into one manageable account. The main purpose of this is to eliminate the higher interest rate debts, arrive at lower monthly payments and allow you to concentrate on one payment alone. It does not, however, lower your total balance. What you will be doing is to shift everything and put them all in one account.

This program can be availed through a debt relief company, bank or credit union who can assist you in negotiating with your creditors to agree to this arrangement. A great debt relief expert can even help you waive off the penalty charges and other fees. This can be done to multiple credit card debts and bills (e.g. medical, utility, etc).

Debt Settlement

Settling your debts used to be a less than reputable practice but it has recently gained prominence. It basically involves a debt relief company negotiating with the creditors on your behalf. The goal is to allow them to agree to a settlement wherein you will pay for a portion of the debt (ideally this should be a sizable amount but not equal to the total balance) and the rest will be forgiven.

As the debt relief company is negotiating with the creditor, you stop paying the bills involved (e.g. monthly credit card bills). Instead, you will be making smaller payments to a separate account to pool in your resources. You need to come up to the pre-planned amount that you have agreed with the debt relief expert handling your case.

Usually, creditors agree to have the borrower pay for only a percentage of their original balance – the rest will be forgiven. Your credit score will be negatively affected with settlement. It is an alternative to bankruptcy so the effects on your credit will be similar – temporarily.

Bankruptcy

This is the last resort if you are really unable to pay because you don’t have any source of income at the moment. This will, however, tarnish your credit history in a very bad way. You will be unable to get financial assistance in the future – or at least you will find it extremely difficult to do so.

There are two ways to file for bankruptcy – Chapter 7 and Chapter 13. Before you can file on any one of them, you need to show proof of your income and other financial documents to prove if you are of the low, mid or high-income class.

Thinking About Filing Bankruptcy?

Thinking About Filing Chapter 11 Business Bankruptcy?
 
We recommend that you get free commercial debt consolidation advice to restructure your company's business debts. 

Federal bankruptcy laws govern how companies go out of business or recover from crippling debt. A bankrupt company, the "debtor," might use Chapter 11 of the Bankruptcy Code to "reorganize" its business and try to become profitable again. 

Management continues to run the day-to-day business operations but all significant business decisions must be approved by a bankruptcy court. 

Under Chapter 7, the company stops all operations and goes completely out of business. A trustee is appointed to "liquidate" (sell) the company's assets and the money is used to pay off the debt, which may include debts to creditors and investors. 

In the commercial debt counseling program, you are in control. Your assets such as inventory, bank accounts, and equipment are protected from day one.  

You decide how much you can afford on a monthly basis to put toward your creditors instead of a court-appointed trustee. 

Creditors are prioritized and critical suppliers are kept providing the materials that you need to keep your doors open and payments and reductions are negotiated with the others. 

We recommend that you get a free and expert commercial debt counseling to restructure your company's business debts.

Exploring Different Debt Relief Options

Debt has become an individual as well as national problem, which stems primarily because of the rapid use of credit cards. Each month, we aim to pay off our credit card bill in full, but are unable to succeed. Stagnant incomes, rising cost of living, undisciplined spending and unexpected life events are only some of the reasons that have increased the number of people who are struggling to get out of their debt.

Consider the high interest rates that are usually charged by creditors, and it becomes an impossible task to manage debt effectively. One of the most important steps for achieving debt relief is look at the different options that can be used for solving the problem.

Each solution that can help people in relieving their debt is unique. People need to learn the facts about each and every option before deciding which one is suitable for their financial situation. Some of the options are as follows:

Mortgage Refinance

People have the option of going for mortgage refinance or home equity loan for consolidating their debt. Debt consolidation refinance loans are considered to be the best option for individuals when they wish to reduce their payments and also lower the cost of interest, as long as they are confident that they would be able to make regular payments without adding more credit card debt. A homeowner has to have excellent credit if they wish to qualify for a mortgage refinance loan and their home should also have significant equity.

Minimum Credit Card Payments

A very dangerous financial strategy for people is to make only minimum monthly payments on their credit cards. This means that people are simply putting off the problem for another month. Individuals should try making their full monthly payments if they want to get off the debt treadmill and achieve debt relief. Otherwise, they will have to deal with the lifetime cost of the debt in the form of high interest payments.

Credit counseling

This is basically a debt relief program, which begins with a detailed and thorough financial review. If people have serious debt problems that cannot be resolved without outside help, the credit counselor will suggest that they opt for a debt management plan. In this program, the credit counselor has the responsibility of consulting your creditors for obtaining concessions in interest rates. The major benefit of a credit counseling program is the lower interest rate it can offer to individuals.

This debt management plan is a very straightforward debt consolidation program. Individuals are only required to make one single payment to the credit counseling agency instead to the creditors. The payment is then distributed by the agency to the different creditors of an individual.

Debt Settlement

This service involves negotiating and settling the debt of an individual for an amount that’s less than what they owe. This can even reduce debt by nearly half and it is an option for those individuals who find it difficult for making their monthly payments, aren’t worried about their credit rating and only want to achieve debt relief.

Bankruptcy

This should always be the last option for individuals and should be chosen after every other alternative has been exhausted because it will stay on their credit report for at least 10 years and will also mean that people have to give up some of their assets. Do it Yourself Credit Repair Kit. Use the tactics that credit repair lawyers use.