A recent study suggested that most Americans have very little understanding of the range of debt relief options available to them. While many options may provide relief, they are not always equal. Since your financial situation is 100 percent unique, why would you choose a generic debt relief option? Before you sign any agreements to settle a debt or file a bankruptcy petition, consider all of your options.
One of the most underutilized services are those offered by credit counseling agencies. You can take a debtor education course, learn about setting and following a budget and even learn the dangers of using credit carelessly. Most of the resources offered by credit counselors are either free or less than a few hundred dollars. Credit counseling companies are a great first step for anyone considering a debt relief plan.
Debt Management Plans
Did you know that you have the right to resolve your debts by yourself? A debt management plan is one that you can develop yourself by creating a budget and prioritizing debt repayments. Simply outline a plan that you can afford and be vigilant about repaying your debts. Pursuing debt management on your own isn’t for everyone. If you have a hard time sticking to your plan or have failed a plan in the past, it is probably better you seek a more guided option.
You can settle your debts two ways. First, you can directly negotiate a settlement plan with your creditor directly. It is possible to obtain a reduction in interest rate or the principal amount owed on a debt, but many people find dealing with creditors to be a hassle. You can also settle your debts with the help of a third party company. Debt settlement companies offer to mediate the negotiations between you and your creditor, taking the burden of dealing with creditors on your behalf.
Typically reserved as a last resort option, bankruptcy can be a great tool to help anyone facing significant financial hardships. Bankruptcy can also protect you from creditors, repossessions, wage garnishment orders and foreclosures. Only a bankruptcy attorney can determine if you are a in a position to benefit from a bankruptcy filing.