Eliminate Your Debt – Realistic And Achievable Solutions By Marie Megge At Isnare.com Ezine Articles

Debt is a burden many people are currently facing, and it’s neither desirable nor pleasant to be in such a predicament. Fortunately, there are realistic and achievable solutions to help individuals eliminate their debt. If you’re finding it more and more difficult to pay your monthly bills and you’re bouncing checks or borrowing from one credit card to pay another, it’s time to take a serious look at these solutions.

• Consumer Credit Counseling – Perhaps you’ve heard of, or even considered consumer credit counseling in order to get your finances under control. Consumer credit counseling agencies are usually classified as “non-profit” firms, and assist debtors in planning budgets to repay their debts. A major criticism of consumer credit counseling agencies is that each office is primarily funded by voluntary donations from the creditors that receive payments from debtors repaying their debts through that office. Obviously, this leaves the average consumer left to wonder whether or not the agency they’ve chosen is actually working for them or their creditors. Nonetheless, consumer credit counseling may be a safe route for you if you can realistically commit to a long term re-payment schedule. If you should decide you’d like to enroll in a consumer credit counseling program, it’s best to choose an agency about which you’ve heard good reviews. Don’t be afraid to ask friends and family if they may be able to refer you – you’ll be surprised by how many people have found themselves in this same predicament.

• Debt Consolidation – Debt consolidation involves obtaining a loan to combine several loans and credit card debts into one loan. Put another way, debt consolidation is the process of taking out a new loan to pay off a number of other debts. Most people who consolidate their debt are usually doing so to attain a lower interest rate, or the simplicity of a single loan. This is a common solution for individuals with credit problems (maxed-out credit cards, car loans, student loans, etc.), who combine all their debts into one loan to create greater ease in repayment. In the case of credit card debt, this can often be advantageous since credit cards generally carry a high interest rate. Normally people seeking to consolidate their debt are required to have a sufficient amount of equity in their homes, which is used as collateral. Be very cautious when considering this option, as 85% of individuals who have gone this route have once again maxed out their credit cards within 24 months of obtaining a debt consolidation loan, and now owe twice as much money as they did prior to consolidating their debt. Still, debt consolidation can be very helpful to individuals who can follow through with their commitment to continuously make their monthly loan payments, and have demonstrated enough self control to not use credit cards for frivolous purchases.

• Debt Settlement – Debt settlement (debt negotiation) is a practice which involves negotiating with your creditors and ultimately reaching a mutually agreeable settlement, which is typically 50% or less of the total amount of debt you owe. In other words, if you owe a creditor $10,000, you may be able to reach a settlement in the amount of $3,000 - $5,000, with no further balance owed to that particular creditor. Many creditors will agree to accept the agreed upon settlement amount over a period of 3-12 installments if sufficient funds aren’t available for a lump sum payment. In order to qualify for debt settlement, your accounts must be delinquent, and of course you must be able to forward the settlement funds to your creditor prior to the deadline, otherwise the settlement agreement will become null and void. Debt settlement is a good option for people who simply can no longer afford their monthly payments, and prefer to eliminate their debt within 3-24 months. To learn more about debt settlement, click here.

• Bankruptcy – As you may know, bankruptcy is really the “last resort” for most people. This is due to the fact that individuals who file bankruptcy are faced with the bankruptcy filing being made a matter of public record, as well as a negative credit rating for a period of 7-10 years. However, some people have no choice and must simply file for bankruptcy. If your bills are unmanageable and it’s impossible for you to commit to a long term payment arrangement, or even obtain sufficient funds for debt settlement, this may be your only option. That’s okay, too – the bankruptcy law was originated for a reason; if you need it, use it. Fortunately, there are many attorneys who will offer you a free initial consultation to help you determine if this is your best path.

I highly recommend that you consider all of your options, and approach each of those with an open mind. What matters most is that you successfully eliminate your debt, and start living again. I wish you the best.

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