Nov 04, 2019 04:51 PM EST
A Comprehensive Guide to Debt Relief Options
Debt relief may change the amount and terms of your debt so that you can live a debt-free life. Remember, your cooperation is always required because there is no magical wand to pay off your debts immediately. Before selecting a debt relief program, it is necessary to understand the consequences of each program. These programs can't be the perfect solution for everyone.
A debt relief program may wipe out your entire debt in bankruptcy or make changes in payment schedule or interest rate. Sometimes, these programs persuade creditors to accept less than the owed amount. Debt relief may help you in:
DIY methods (debt consolidation)
Debt settlement and bankruptcy may eliminate or decrease debts. They may not impact your credit. On the other hand, debt management may not reduce debts, but it can make your credit less severe.
Get the Advantage of Debt Relief Order
A DRO (debt relief order) may help you to write off your debt. This order will help you to get relief with a low level of debt and few assets. A DRO team will evaluate your financial condition before issuing this order. With a DRO order, it is possible to freeze your interest and debt repayments for almost 12 months. Remember, a debt relief order may be a low-cost substitute of bankruptcy. Check this website if you are interested in a debt relief order.
Start with Budgeting
Better budgeting may help you to pay off your debt in a timely fashion. Try to decrease expenses to increase your savings. To repair your finances, debt relief may be a good choice for you.
Time to Seek Debt Relief
Remember, debt relief is not a pain-free or easy fix. You can consider debt settlement, debt management and bankruptcy in these conditions:
You can't repay unsecured debts (personal loans, medical bills, credit cards) within five years, even after taking extreme measures.
Total of unpaid (unsecured) debt is equal to half or over your gross income.
In this situation, you can consider a DIY (do-it-yourself) plan. Feel free to try a combination of appeals to creditors, stricter budgeting and debt consolidation. These options may help you to repay an unsecured debt within five years.
Understand the Cons of Debt Relief
Debt relief industry has many scammers who always need opportunities to steal your money. People who enter these programs often fail to complete them successfully. As a result, your debt will become bigger than before.
With the help of a trustworthy debt relief program, you must get some breathing room for a new start. Before agreeing, make sure to understand these points:
Do you qualify for this agreement?
How much fee will you pay for this agreement?
How many creditors will get paid? In the case of debt collections, understand who owns these payments so that you can contact the right agency.
Check tax implications
If you are interested in debt relief through bankruptcy, make sure to contact a qualified bankruptcy lawyer. He can help you in a better way with a customized debt management plan.
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