If you're overburdened with multiple bills and finding it hard to cope, take advantage of debt resolution services and get relief from stress. Debt resolution services help you cut down your interest rates or outstanding balance. The purpose is to help you pay your obligations without creditors calling you day and night and threatening to sue you.
The best way to find out whether you should lower your interest rates or ask for a reduction in balance is by going for a free counseling session with a debt relief company. This is when a counselor would analyze your financial situation, do an income/expenditure analysis and help you decide upon the right option to get rid of your bills faster.
When should you reduce rates and balance?
You may negotiate low interest rates under the following situations:
- You can't manage multiple bills on a monthly basis.
- You'd like to lower your monthly payments.
- You have a job and can pay less each month.
You may reduce the outstanding balance when:
- You're in financial hardship such as job loss.
- You're paying a lot of cash towards medical treatment.
- You don't have enough money to pay interest.
- You'd like to pay off dues with a lump sum payment.
- You wish to avoid dealing with several creditors/CA.
What are the options which help you reduce rates?
When you wish to get rid of high interest rates and make your monthly payments affordable, you may take advantage of the following options.
- Consolidation program: This debt resolution program is offered by consolidation companies that work with your creditors/collection agencies to cut down your interest rates and reduce your monthly outgoings. The best thing is, it'll help you pay off multiple bills with a single monthly check instead of many. A consolidation program lasts for 4-6 years. Find out more....
- Debt management: This is mostly available with credit counseling agencies which negotiate with creditors or collection agencies to lower the interest rates on those accounts which are tough to manage. If you have incurred late payment fees on such accounts, you may be able to reduce/eliminate them with the help of this program. This debt resolution program is suitable for those who have different types of bills such as payday loans, credit cards, store cards, medical bills, utility bills and others. The program usually continues up to 3-4 years. Know more....
- Self repayment plan: This is where you try to resolve payment problems on your own. Request your creditors to reduce the interest rates on the bills which you can't pay for. You need to explain why you couldn't keep up with the payments and propose an alternative plan to your creditors. Get more details....
Which option can help you trim your balance?
There are 2 ways by which you can reduce the balance you owe. These are:
- Settlement: It is a debt resolution program that can help you erase a part of the balance on your accounts. When you enroll in a settlement program, a negotiator at the settlement company communicates with your creditors to cut down the outstanding balance by 40-60%. Negotiations may help you get relief from harassing calls made by creditors or collection agencies. With settlement, you'll get rid of dues within 2-4 years. Check out the pros and cons of settlement. You may also use the Settlement Calculator to determine how much you need to pay after negotiation and what amount you'll save.
- Do it yourself: In case you'd like to get rid of dues without taking professional guidance, you may use the Snowflake method which is helpful in dealing with credit cards as well as other dues. This method requires you to make multiple micro-payments to reduce your balance and pay off dues faster. Find out more about the Snowflake method.
6 Debt resolution tips to watch out for
Here's a checklist of what you shouldn't do when you're on your way to paying off your dues faster.
- Do not go for new credit when you're on a debt resolution program
- Do not make a big purchase with a credit card or loan
- Prepare a well-planned budget and control your expenses
- Look out for ways to supplement your income
- Try making extra payments on your bills as and when it's possible
- Pay more than the minimum on your credit/store cards
When you're stressed out with managing a lot of bills, you may choose a debt resolution program depending upon your financial strength and the balance you owe. Before you enroll in such a program, make sure you're working with a reliable company. Look out for accreditations of the company and online records available at the BBB. Check if there are complaints against the debt resolution company. The purpose is to make sure you deal with the company which can help you resolve your payment problems without any hassle.