Debt Relief Programs

How to find the best debt relief option.

Living a debt free lifestyle is one of the smartest decisions you can make. It’s also one of the hardest if you’re already burdened with heavy debt and living paycheck to paycheck. It can seem virtually impossible just to get back to zero. 

Fortunately you have several options to get your finances back on track. Not every option will be right for you. Find out which of these actions fits your specific situation to make the best choice to getting out of debt and living the life you want to live. 

Debt Settlement 

Debt settlement can go by different names. Some companies call it Debt Negotiation. Some call it Debt Resolution. But all these terms essentially mean the same thing – getting your overall debt amount lowered significantly by talking with your creditors and debt collectors. 

Banks and debt collectors do not have your best interest in mind, which is why most people hire debt settlement companies to interact with them on their behalf so they’re not taken advantage of. 

If you have over $10,000 of unsecured debt and can’t keep up with the minimum payments then debt settlement could be your best option. Unsecured debt are debts such as credit cards, medical bills, utility bills and some types of personal loans not tied to an asset. Learn more about if a debt settlement plan is right for you. 

Debt Consolidation Loans

A consolidation loan is used to pay off multiple high interest unsecured debts to have only one payment each month at a lower interest rate. Many people get caught in a minimum payment trap each month where they are only paying the interest on their debt and not actually paying any of it off. By getting a loan with a lower interest rate than you are currently paying, you can use the saved money to pay down the debt. 

Another reason people opt for a consolidation loan is to protect their credit score. With debt consolidation you pay off your debts in their entirely. Other debt relief options require defaulting, closing accounts and settling for less than you own which can have a negative impact on your credit score. If you are employed and able to make your minimum monthly payments, a debt consolidation loan could be a good option. Learn more about if a debt consolidation loan is right for you. 

Credit Counseling/ Debt Management 

Credit counseling agencies, sometimes referred to as Debt Management companies, are usually non-profit organizations that work with banks to lower your interest rates. Through a debt management plan you will work to pay back all of your debt owed lowered interest rate. 

In order to be accepted into a DMP, you will need to have reliable monthly income and be able to keep up with your current minimum payments. Credit counseling is a good option for those not looking to damage their credit score. Learn more about credit counseling to see if this is the best option for you.

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