Being in debt is definitely not a desirable situation. However, in the current situation when finances are unstable it’s not possible either to do without borrowing. There are student loans, credit cards, auto loans and mortgages to take care of. Apart from that, the job market isn’t promising either. In such a circumstance, it can be difficult for a consumer to maintain the financial balance in life. The only way to achieve financial stability is debt resolution.


What you need to do for successful debt resolution?
Debt resolution requires you to take care of a few important things, like:

·         Your monthly payments.

·         The time frame.

·         The interest rate charged on your debts.

You need to prepare the right repayment plan through which you can pay off your debts as early as possible. Avoid taking too much time for the payments, or else you’ll have to pay more as interest on the debts. Continue your monthly payments on a regular basis to shorten the time frame. So, you can see the three factors mentioned above are interconnected. To solve your debt problems successfully you’ll have to take care of all the three factors.

The options that you may select for debt resolution

The range of debt resolution services is huge. Amongst all, credit counselling, debt settlement and consolidation are some of the popular options. Bankruptcy is also a solution for your debt problems. But, it’s better not to think about filing bankruptcy at the very beginning when you can still settle your debts easily.

Selecting the right debt resolution service can be tricky. So, you should understand the options well and select according to your convenience. Here is a description of some important and effective debt resolution services that you may opt for:

1.     Debt settlement: Debt settlement is supposed to be the fastest and most effective solution for debt problems. Careful negotiation with the creditor may help you to reduce the total amount of debt up to 50%. The monthly payments will be affordable as well. That’s why people find debt settlement the easiest way to eliminate debts. Apart from the benefits, there are some facts that you should be aware of. Settlement affects your credit score. There are tax consequences as well. The forgiven debt is taxable according to IRS. If your creditor is forgiving debt of $600 or more than that, he’ll report that to IRS through Form 1099-C. So, before you opt for settlement make sure you get all the details from beforehand.

2.     Credit counseling program: Credit counseling programs are beneficial as the counseling sessions always help a lot to realize exactly how grave is the situation. Apart from that, the experienced counselors make it easier to convince the adamant creditors and reduce the interest rate to some extent. Credit counselling program takes around 5 years to be completed. If you’re planning to enroll into a credit counselling debt management program, then it’ll appear on your credit report. Credit counselling programs don’t help in reducing the total debt amount. It only lowers the interest rate to some extent.

3.     Consolidation program: There is another effective option - debt consolidation. With debt consolidation, you can consolidate your multiple due bills easily and eliminate your debts conveniently. Just talk to your creditor and manage to get some reduction on the interest rate. To convince the creditor without much hassles you can look for professional help. There are numerous professional debt consolidators that may help you to get out of debt. Always, remember to take extra care of your credit score right after completing a consolidation program.

As you can see, all the options have their own pros and cons. So before you opt for a debt resolution service, check the all the necessary details to select the most suitable option.
 


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