Are you drowning in debt? Are thoughts of unsecured debt keeping you awake at night? For many consumers, debt relief is a viable solution to unmanageable debt. And it just may work for you.
Fortunately, there are several ways to reduce debt, interest rates and fees – and pay it off faster than you ever thought possible. This can be done by working with financial professionals who specialize in debt relief, who can negotiate debt reduction, lower rates with lenders, and help you with a budget that keeps you on the right course.
Some of the professional credit card debt relief programs that don’t require to take out a consolidation loan include:
Credit Counseling, or Debt Management Programs
If you have unsecured debt that you can’t pay, even at lower interest rates, there’s no need to panic. You still have options. A debt settlement is an arrangement made between you and your creditors to pay less than the amount owed, either in a lump sum payment or over time as part of an installment loan.
If you hire a professional debt relief company to negotiate on your behalf, you could settle your debts by paying potion of the total amount owed, as well as having any late fees and penalties waived. On average, people save between 40 to 60 percent of their total debt in a settlement agreement.
Debt settlement isn’t your only option if you have unmanageable debt. You might consider credit counseling.
A credit counselor will work with you to create a budget and better manage your finances so you can get a handle on debt. As part of this, a credit counselor may help you set up a debt management plan (DMP) that helps you pay one consolidated payment that you can afford.
A debt management plan may allow you to eliminate fees and late charges, and reduce interest on your debt. It most often does not reduce what you owe, but you will make lower monthly payments to pay the remaining balances. This is an important difference between a debt settlement and a debt management plan.
Additionally, a debt management plan requires that you include all your unsecured debt—even bills you’ve been paying on time. When you negotiate debt settlements, you can “cherry-pick” which debts you’d like to settle and which you’d like to continue paying on time each month.
What Could Happen if You Don’t Consolidate Your Debt
If you don’t make a decision to consolidate your debt, you’ll risk high payments, mounting interest that increases your debt, and you may eventually be forced into bankruptcy if you can’t pay your creditors.
If you’re in debt and struggling to make your monthly payments, take action now. Don’t wait for things to get worse. There is help available, and you have a variety of choices for debt consolidation.
Best of all, you can lower your monthly payments and get out of debt in just four steps.
That really depends on your credit score. If you have a good credit score your debt consultant might be able to help you avoid being reported to the credit bureaus.
Note: some creditors might still report you to credit bureaus if you take out a debt settlement plan. Unfortunately, no-one can help you fix a bad score, but the score can improve over time if you get a record of making payments on time.
Your debt relief consultants cannot get rid of interest or late fees that you accrued before joining the debt relief plan. But your debt relief consultants may be able work out a settlement that can help you avoid future late fees.
Please note that interest will keep accruing as long as you have an unpaid balance, even if you are in a plan. The only way to stop interest from accruing is to pay off the balance.
Yes, but it is not a good idea. You will probably have no way of knowing if you are getting a good deal from creditors. Many people who negotiate themselves end up paying too much, and get stuck with lousy plans.
A debt negotiation specialist usually handles million in debt every month, so they know all the tricks of the trade. They know what they are doing so they can usually get the best settlement possible.
Most times. The amount you have to pay back is determined by the creditors, not debt relief programs. Your debt consultants will have to negotiate with each of your creditors. Some creditors will reduce debts in exchange for a payment, some may not.
Some creditors will demand repayment in full, but many of them are willing to work out new payment arrangements. Some creditors will accept a lower amount; but it is usually 50% to 75% of what is owed, not pennies on the dollar.