Are you currently deep in debt with no foreseeable end in sight? Do you dread answering the phone because you’re afraid of who might be on the other end of the line? Dealing with debt can be one of life’s biggest stresses, though things won’t get better until you seek professional help and until you have a set of debt relief strategies that work. Fortunately, there are a variety of steps you can take to begin addressing your out of control debt and as you will learn in the following article, many of them are easier than you might think.
When you think of debt relief programs, the first thing that probably comes to mind is the personal bankruptcy process. After all, if you’ve ever watched late night or mid-morning television then I’m sure you’ve seen countless advertisements from shady companies that promise to heal your finances through a bankruptcy claim. While claiming bankruptcy can certainly be a valid option under certain circumstances, the process isn’t for everyone. Stepping into bankruptcy without knowing how to claim bankruptcy and without understanding the consequences involved can be devastating. The good news is that most individuals can take advantage of a variety of other debt relief options without resorting to filing bankruptcy.
If your goal is to avoid the bankruptcy process, then it’s important to arm yourself with a plan to address your debt issues. Consider the following strategies for debt relief –
Credit Counseling
Credit counseling is generally thought to be a first step in the process of debt management, though it can be a fairly effective way to learn the ropes of proper money management. There are two forms of credit counseling; one involving educational materials and presentations that are designed to teach the debtor about money management strategies. The other form is essentially a payment service whereby you provide the counseling agency with money each month that is used to pay your bills. The agency ensures that your bills are paid on time and in full, making this a perfect option for those that have the money to pay their bills, but that lack the initiative to get it done. Credit counseling can be a great way to lower your interest rates, which can allow you to address your debts more effectively.
Debt Settlement
Also known as credit card debt forgiveness, the debt settlement process involves direct negotiations with your creditors for a reduction in the amount you owe. This negotiation can be done on your own or through a debt settlement attorney, which is the route we recommend. While you can certainly achieve credit card debt relief through direct negotiations, a professional has much more experience in the art of negotiation and they know how to manipulate your creditors into reducing your rate by up to 60%.
When choosing a debt settlement company it’s critical that you select one that has built a solid track record of success and ethical business practices. Unfortunately, there are many agencies out there that simply don’t have your best interests at heart. To avoid dealing with a sub-par company, consider setting up an initial consultation with prospective agencies to learn about their practices. It’s also a good idea to ensure that you hire a company that only expects payment based on a successful negotiation. Ideally, their fee should be a percentage of the total amount of debt that they are able to reduce.
Personal Bankruptcy
Filing a personal bankruptcy claim should be a last resort due to its severity and the effect it can have on your credit rating and ability to secure financing post-filing. The bankruptcy process was instituted to provide hopeless borrowers with a way to start over in terms of their finances, and while it can certainly be an effective vehicle for financial repair, it’s important to first examine other options before simply filing a claim. In addition to the damage a claim will impart on your credit rating, there are bankruptcy fees to contend with and the time-consuming aspect of the filing process itself.
For more information on debt relief through the different types of bankruptcy and for a complete guide on how to go bankrupt, please feel free to browse through our comprehensive site.