Debt Relief Options

We live in unstable financial times and it is quite common nowadays or people to carry $10,000, $20,000, $50,000 or even more of debt. Usually, people ignore this problem and hope that everything will get better down the road. Unfortunately, we have to deal with this problem and to find a way to overcome it. People start cutting everyday life costs, working over-time, but these strategies are very stressful. So, what are the solutions? For families or individuals drowning in a credit card or other unsecured debts, in general there are 5 debt relief methods: Credit Counseling or Debt Management, Continue making minimum monthly payments, debt consolidation, consumer debt negotiation or debt settlement and bankruptcy. Every mentioned option has its own advantages and disadvantages and it depends on personal specific circumstances which one would be perfect for a certain person (or family)

Minimum monthly payments are good solution as long as a person is able to do it continuously for a longer period. Anyhow, this is considered to be probably not so good strategy. Debt management (credit counseling) is a program offered by a debt counseling agency. For a single monthly payment, a client gets his money distributed to his/her creditors on his/her own behalf, in ideal case at somewhat lower interest rates so he/she gets an opportunity to pay off the debt for less time. Debt Consolidation is a solution when a client takes out a larger, low-interest loan and with that money he/she pays off higher-interest unsecured loan. Debt negotiation differs from other options because a client ends up owing less, it is a solution of faster and less expensive debt relief. Bankruptcy is perhaps inevitable for individuals and family that cannot meet their debt obligations. When a client formally declares a bankruptcy, he/she does not owes some or all of his/her unsecured debt and this stops the creditor collection process.

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