Debt OMG! offers several options for debt relief, including: debt consolidation and debt settlement services. But these aren’t the only options for resolving your debt problems. Depending on the situation, other tactics may be available to assist you in reducing or eliminating debt. We’ve created a list of five debt relief options below. Although we provide many of these services at Debt OMG!, some of these options don’t require any assistance from a third party. We recommend that everyone research and understand these options before they consider any debt relief program. Here are some solutions to consider:
1.) Do-It-Yourself Debt Relief
If you are willing to work hard, have good organizational skills and can muster up the financial discipline to stick to a plan, then do-it-yourself debt relief is an option worth considering. It will require research, organization and planning. You will have to create a budget — and stick to it! It won’t happen overnight and patience is key. Unfortunately, it’s often a lack discipline that gets people into debt, so this isn’t an option for everyone.
2.) 0% APR Credit Cards
WE DON’T RECOMMEND THIS METHOD LIGHTLY! Credit cards are often the source of many people’s problems! This do-it-yourself option is only recommended if you can remain disciplined! You need a good credit score, so if you’ve already missed payments or have damaged credit, consider another solution.
Most credit card companies offer low introductory rates and 0% APR credit cards to entice new customers. This means you can transfer your existing credit card balances and pay zero interest for 12 months (or more). This will eliminate your monthly interest charges and you can apply the extra savings towards the principal of your debt. So you can keep paying the same amount each month, but your balances will be reduced much quicker!
BUT BE AWARE. Without financial discipline, you’re likely to get yourself into even more debt! Although these offers often include “balance transfer fees” of 2-3%, the savings will still outweigh the fees. You also need to be aware of the intro length and be ready to switch before it ends. Otherwise, you could end up paying more interest than before and it will negate all the savings you’ve made by switching.
3.) Debt Consolidation Loans
A debt consolidation loan is often the fastest and easiest solution for people trying to reduce or eliminate debt. By consolidating your unpaid balances into one, easy payment, you’ll simplify your finances and reduce your monthly debt load. This will limit the burden of high monthly payments and give you the opportunity to get back on track. It’s important to stay disciplined during this process and not create any additional debt. This will put you back into the same situation that created your debt problems.
4.) Debt Settlement / Credit Counseling
Credit counseling and debt settlement are very similar debt relief options — and are often used as a last resort. Credit counseling focuses on reducing interest rates with your creditors, while debt settlement tries to reduce your total credit balances. Although debt settlement will often create higher savings, credit counseling will have less impact on your credit score. Both have a variety of variables that can influence which option is the best, so the assistance of a debt counselor is a must. Since both can negatively impact on your credit, these methods should be considered with care and only used if absolutely necessary.
Bankruptcy is a final option for people with no other options left. Bankruptcy is the legal procedure that allows you to discharge your debt if you have no method to pay it off. It has many negative side affects, worst of which is the fact that it can impact your credit score for up to 10 years! And it’s not guaranteed that you’ll be completely free from liability. There are different types of bankruptcy (Chapter 7 and Chapter 13) and each has pros and cons. A legal professional is advised to assist with the process.