You should know that such debt relief don’t take place overnight. This is certainly a long process and such is not pain-free too. If you can repay the debts that you have by changing those spending habits you have, then this should be your first option.
If you think that you are able to repay such unsecured debt in five years, then you must think about doing this yourself. Make sure that you contact those creditors for restructuring the budget, debt consolidation or other repayment plans. However, when you have exhausted the many options for repayment and you don’t have any hope of repaying that unsecured debt in such foreseeable future, then you should go for bankruptcy. You should also opt for this when the total balance of the unpaid debt is equals half of the income. However, when there isn’t hope in these solutions, then there are other options.
You may go for credit counseling now. The Credit Card Act of 2009 needs the credit card companies to publish that toll-free number for such consumers who require credit counseling help. Such credit counseling agencies are going to check the debt and also the income and they will provide you with such debt management plan or consolidation of debt option. There are some organizations having agreements with the creditors to minimize the interest rate on the debts. They would work to help you choose that solution that works great for your budget. It is not necessary for you to agree to a plan. You can take the suggestions and the advice of the counselor and simply try such all by yourself.
The credit consolidation is an option that the credit counselor will provide you. You will be asked to take a loan on this to settle the unsecured debt. It is the objective of such to just have a low-interest loan rather than trying to settle several debts. With this, you will just be paying one creditor now instead of paying five creditors each month.
Another option that is recommended by the credit counselors is the debt management. It is the goal of this to get rid of the debt by reducing such interest rate and fees. You should get a lower monthly payment that you are able to manage with this. The debt management programs are able to help you keep the credit score intact.
That debt settlement program is also a great choice because the lender would agree to get less than what you actually owe. You should pay one lump sum in order to settle the unsecured debt. You don’t have to get a loan, so it would be good option when your credit is poor.
But, of the different debt relief programs, you should know that bankruptcy is really damaging. Such may offer financial relief but this would come with really severe consequences. So that you can have a better understanding of this option, then you should research more and get more info.