Debt relief is possible even if you are deep in debt!!
If you're in trouble managing your credit cards, medical bills, payday loans and other bills, debt relief programs can help you out of this situation. There are several kinds of debt relief programs such as consolidation, settlement and debt management. You can find the best out of these options by going for a no-obligation free counseling session. Take a look at the topic given below to know about the various debt relief options:
- 6 Debt relief options - How to use them to your benefit
- 5 Types of bills you can repay through relief options
- Best debt relief companies - How to find them
- 3 Tips you need to follow while working with companies
- Debt relief Act – 6 Facts you must know
6 Debt relief options - How to use them to your benefit
Watch out for the 6 emergency debt relief options listed below and find out how best you can use them to your benefit.
- Consolidation programs: If you are looking to lower rates and make one monthly payment on your bills, you can enroll in a consolidation program offered by any of the debt relief USA companies. The companies negotiate on your behalf to provide you with the following benefits:
- Reduced interest rates
- Low monthly payments
- Reduced or waived off late fees
- A single monthly payment
- No harassing calls from creditors/CAs
There are 2 purposes of a consolidation program:
- Credit card consolidation: If you cannot manage your credit cards effectively, you should go for credit card consolidation. Using such credit card debt relief programs, you can consolidate multiple credit card bills into a single payment each month. A debt relief USA company can work with your creditors and help you consolidate credit cards.
- Bill consolidation: If you've fallen behind on medical bills, utility payments and others, bill consolidation can help you overcome the debt burden. Credit cards, store cards and personal loans can also be included in such debt relief USA plans or programs.
- Debt settlement: This is a program where a settlement company negotiates to reduce your outstanding balance. Settlement is one way of getting credit card debt relief especially if you have too many cards and cannot make the minimum monthly installments.
The benefits of settlement are:
- Single monthly payment
- No/reduced late payment fees and over-limit charges
- Avoid lawsuits and wage garnishment
- Creditor and collection calls stop
- No need to file bankruptcy
- Debt management: It is a debt relief USA program where a credit counseling agency analyzes your financial situation and negotiates with your creditors. The purpose is to help you pay off your bills comfortably. Instead of paying your creditors, you send in your monthly payment to the credit counselor. The counselor distributes the payment amongst all your creditors.
With debt management, you get the following benefits:
- Reduced interest rates
- Low monthly payment
- Waived off late fees and extra charges
- Avoid creditor/collection calls
- Interest rate arbitration: This option allows you to repay your current unsecured bills through a secured loan at low interest rate. The main aim is to reduce your stress through smaller monthly payments.
The 3 benefits of interest rate arbitration are given below:
- Smaller monthly payments
- Better interest rate
- Single payments every month
- Self repayment plan:This is where you manage your debts without the help of professional debt relief USA programs. Here you make a list of your unpaid debts, prioritize them, and then prepare a budget so that you can pay off bills and manage your daily expenses efficiently.
The benefits of a self-repayment plan are:
- Pay off bills on your own
- No need to pay a third party
- Learn to budget and manage your finances
- Bankruptcy:You can file Chapter 7 and Chapter 13 bankruptcy when none of the other debt relief plans or programs have managed to help you get out of your debt. Bankruptcy helps you get relief from debt through the court intervention. It is your last hope. That's because bankruptcy ruins your credit history and makes it difficult to qualify for loans and credit. So, it is better to avoid bankruptcy and try out any other debt relief USA program.
You can have a look at our 41 Ways to compare and contrast major debt relief options and select the one that's best for you. You can evaluate all the debt relief options, understand their pros and cons, and select the best one most suitable for your financial situation.
5 Types of bills you can repay through relief options
Debt relief USA companies primarily help you get respite from high interest unsecured bills. They can’t help you repay your auto loans or mortgages. Those are secured debts. You may refinance those loans to fulfill your financial obligations.
Check out the 5 types of unsecured bills you can repay through debt relief programs or plans:
- Bills acquired through cash advance loans
- Bills incurred due to medical treatment
- Bills accumulated through credit card purchases
- Bills that have been assigned to collection agencies
- Bills accrued through utility services
Best debt relief companies - How to find them
You can find out the best debt relief companies in the following ways:
- Check the service background: You have to check out the profile and track record of the debt relief companies you are planning to work with.
- Go through the client testimonials: You need to go through the client testimonials to find out whether the existing customers are satisfied with the service of the company.
- Check the fee structure: The best debt relief companies normally have a moderate fee structure. You should work with a company that offers you best service at cheapest rate.
- Look for company accreditations: If you really want to get relief from debt, then you have to check out the company accreditations. Find out whether the company is certified by
TASC, IAPDA, etc before deciding to work with them.
Debt relief is possible even if you have a lot of debt. Take the initiative and talk to your creditors to see if you can work things out on your own. If you can't, then get some professional help to consolidate or settle your debts.^Top
3 Tips you need to follow while working with companies
Here are the 3 tips which you need to follow while working with the companies to get relief from debt.
- Don't accumulate fresh bills: You can never get respite from financial obligations if you keep on accumulating new bills. Make a pledge to avoid new debts. You can do so in the following ways:
- Restrict your credit card purchases
- Learn to formulate and live as per your budget
- Send money to your creditors on time
- Borrow only when there is no other choice
- Turn your back to the payday loan lenders
- Avoid becoming a co-signer
- Send payments to the companies: You won’t be able to get out of debt without money. The credit card debt relief companies need to disburse money amongst your creditors. You need to send money to the companies out of your own pocket. If you don’t pay as per the agreed terms and conditions, then you would never be able to come out of monetary problems.
- Save money when you can: Develop strategies to save money when you can. Save money on transportation, food, clothes, house, utilities, etc. in order to free up some cash. The more you save, the better for your financial health. You can use the money to pay back your creditors through the debt relief options sooner.
Set aside 10 percent or more than that from your wage every month. Use this money to make the payment process faster. Saving is a continuous process. You need to continue this process all the year round to be prepared for the emergencies as well.
Debt Relief Act – 6 Facts you must know
Not many people are able to find out the best debt relief companies in USA. They end up working with the fraudulent companies. Federal Trade Commission enacted and made changes in the Debt Relief Act so as to help consumers to avoid getting scammed. Here are the few rules and regulations which you must know before working with a company.
- The companies can’t ask consumers to pay an upfront fee verbally or in writing
- The companies can’t make false promises to the consumers
- The companies have to inform consumers about the tenure and different aspects of the programs
- The companies can charge fees after negotiating/reducing/settling debt
- The consumers need to pay fee and save money in a dedicated account
- The consumers will have full access to the account
If you find that a company is not following the rules and regulations, then don’t sign any agreement with them. Negotiate with the company on your own instead. Check out the steps to become debt free and spend a good financial life.
"Last updated on 03rd Jan, 2013"^Top