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.
Simply find any one of a number of debt relief programs online and talk to one of their debt consultants. These professionals have a lot of experience to offer you. They will go over your case and recommend the best course of action for your situation.
Absolutely not. Your debt reduction program is a plan not a loan. It works by making a monthly deposit to a dedicated account that is used to pay off your loans or credit card balances. Although you can use the program to pay off a debt-consolidation loan if you have one.
Usually it is, but there can be restrictions. You will have to call and ask your debt consultants because laws vary widely from state to state.
Yes, you can. Many people like to keep one or two cards out of their debt program to use for emergency finance. But generally, you should put all cards with a balance of more than $500 in the program, because that will make it easier for your debt consultants to negotiate a settlement.
That depends on your situation. Debt relief companies can help you pay off your unsecured debts, such as credit cards, medical bills and personal loans, but not secured loans such as mortgages.
If you successfully complete the debt relief program you should have more money available to pay off mortgages and car loans. This means a person who has no secured loans can become debt free through a debt relief program.