The top 3 most popular debt relief options
There are times when getting out of debt may not be that simple and is to a point where one may need to seek debt relief options. This is because this could be the only way that one can get out of debt without having to destroy their financial credibility. Debt relief options need to be laid down to you by professionals who know all the requirements for the right debt management practices. When you are looking at the option there are many factors that one should consider but the biggest concern needs to reduce the current financial constraint that one may be suffering. Here are some of the best debt relief options.
- Debt Consolidation
This is one the most effective debt relief option; this is where one consolidates all their debts into a single debt. The good thing about debt consolidation is that merging all the debts allows one to repay them at a much lower interest rate which will, in fact, reduce your financial strain. The other good thing about consolidating your debt is that you will be paying off all your entire debt. The consolidation options give you a fixed interest rate and also a fixed timeline and you will know exactly when you will be debt free. The other benefit of debt consolidation is the fact that you get a chance to negotiate for better terms or even get an extended time to repay your debt.
- Debt Settlement
This is another viable debt relief option; here what you do is looking for debt forgiveness and some kind of renegotiation of terms. In debt settlement, your creditors basically pay a lump sum of your debt but it will be less than what you owe. The settlement company which pays on your behalf will then require you to make payment to them on the agreed basis. In debt settlement what basically happens is that a negotiation is done with the creditors and depending on the negotiation they usually reduce the total amount which is owed. The good thing about debt settlement is that the debt can be reduced by over 60 percent. Debt settlement can help ease the debt but there is a potential that it can hurt your credit score.
- Bankruptcy
This is the last resort of the debt relief option. When all other options have failed then one should consider filing for bankruptcy. This is not always the most preferable options as it can have a significant impact on your credit score at times it’s the only option which remains. In filing for a bankruptcy claim there is so much which is at stake because your assets are in danger and the asset you own may not be able to pay off the loan which you owe. Before considering filing for bankruptcy one should know that the ramification you may face can last up to 10 years and then it makes it extremely hard to get financial aid in that period of time. Bankruptcy relief option should be the least favorable form of debt relief options.
