Dealing with debt… it’s a never-ending topic of discussion. The Internet is overflowing with information, but it’s not exactly the most exciting or interesting subject to talk about. Unfortunately, it’s an issue that millions of Americans deal with, and it just so happens that IT’S THE FOCUS OF OUR BLOG. Often considered a sign of incompetence, debt issues can sneak up and wreak havoc on just about anyone. Even the most responsible individuals can be caught off-guard by a sudden job loss, a major medical emergency or investments that are decimated by a stock market crash. Life can be turned upside down in an instant, and drastic measures may be the only solution.
In the worst case scenario, debt trouble can end in bankruptcy, but for the majority of consumers who find themselves in a precarious financial situation, there may be ways to rebuild their reputation without involving the legal system.
Do-It-Yourself Debt Solutions
Dealing with debt issues on your own can be difficult, but it’s definitely not impossible, depending on the amount of damage. Start by being proactive when you first see trouble on the horizon rather than waiting until it becomes a crisis that you can’t control. Revising your budget, paying down high-interest balances and finding creative ways to save money will be important keys to your success.
If your do-it-yourself routine fails to make an impressionable dent in your debt, it may be time to consider professional help. Debt assistance companies provide options that are not readily available to most consumers. Their working relationships are a big advantage if you’re looking to fix a debt problem and may include many of the leading banks, financial institutions, lenders and creditors.
Debt Consolidation Services
An excellent option for people who own their own home, debt consolidation is in essence a home equity loan that encompasses your mortgage and other debt into one monthly payment. You may also be required to have a minimum FICO score, be fully employed and be earning a minimum income.
Don’t make the mistake of discounting this option because you struggle with your current mortgage payment. Once you eliminate a number of monthly payments by rolling them into one consolidation account, you’ll see that the possibility of paying a larger payment is more doable than you first thought.
If you’re looking to secure the services of a debt consolidation company, the first step is to request a free estimate from several reputable firms. A reputable debt consolidation service will help you to accomplish several important goals:
Benefits of Debt Consolidation
- Freeing up cash
- Lowering interest rates
- Paying down debt
- Making one convenient payment
- Improving your credit score
Each debt consolidation quote will show you which credit accounts will be settled through consolidation, the monthly payment and how long it will take you to pay off the debt. The most important variables to look for are the interest rate and any fees being charged by the debt consolidation company. The lower the interest rate and fees, the more money you’ll save while working to clear your debt.
Debt Settlement Plans
If you’re struggling with more than $7,500 of debt, another option is to negotiate for a lower payoff amount. Consider debt settlement if you have unpaid medical bills or unsecured debt like credit cards that are impossible to pay by other means. You can negotiate on your own, but a debt settlement company will have more leverage to mediate on your behalf. They know the legal system and have the skills to communicate with creditors and collection agencies, often securing deals for a fraction of what you owe. Debt settlement services are highly effective and can save you between 50 – 75% on your outstanding debt and improve the relationship between you and your creditors.
Before You Choose…
Before you choose a debt consolidation or settlement company, review the fine print so you know exactly where your money is going. Stay away from companies that promise unbelievable results or guarantee that there will be no impact on your credit score. Long term debt troubles take time to resolve, and depending on the program, the resolution is likely to hurt your credit rating in the short-term. Here are some tips to keep in mind:
- Read the terms and conditions from each company carefully.
- Ask questions and make sure you understand the cost, terms and benefits.
- Contact the Better Business Bureau and your state’s attorney general’s office to verify the reputation of the company.
With professional help, your monthly payments will be lower and you will have one payment instead of multiple bills each month. Your creditors will stop calling and the anxiety associated with your financial problems will be lifted as you begin building a better financial future. Over time, your debt will be reduced and your credit score will improve – providing the confidence and stability you’re looking for