Popular Debt Relief Strategies - Which Are You Eligible For?

There are several popular debt relief strategies

. I take the entire responsibility to call each one of them popular because, each strategy suits a specific financial condition and if you are in one of those situations, the available strategy will become popular to you! Well, that is a simply logic.

The different debt relief strategies available are mentioned below with an explanation that will help you judge whether a mentioned strategy will be suitable for you or not!

Credit Counseling:This method is applicable for all. Anyone can opt for this, whatever be the debt amount. All you need to do is to hire a credit counselor who will contact the creditors you have and negotiate for a reduction in the interest rates. If the creditor agrees (which they normally do), they will re-amortize the repayment schedule. You need to give a certain amount of the money to counselor every month which the counselor will then distribute to the creditors. There is no savings on your part and you need to repay the entire debt to your creditors with a little reduction in the rate of Interest. However, you need to have a constant flow of income and the income needs to be a consistent one for at least 5 years. This is because of the fact that with credit counseling, you will be able to get out of debt completely in 5 years or more.

Debt Settlement: This method is suitable only for those who have an overall consolidated credit of $10,000 or more. If the loan amount you have is less than that, you are not eligible. You need to hire a professional settlement firm who will negotiate with the creditor on your behalf and eliminate the debt by at least 50% and up to 70%. You will have considerable savings. A certain percentage of the money saved will be taken by the settlement firm as their fees. You again need to have monthly income flow so that you can accumulate money for lump sum payment at the end of the negotiation.

Bankruptcy: This method is applicable for those who don't have any income (for instance, unemployment is one such situation) or very less income which is spent for bare existence. You will have to qualify for bankruptcy and your qualification will be judged by the credit counselors appointed by the law. If they feel that you have no other option but to file for bankruptcy, they will allow you to go for it. Once you file for bankruptcy, the entire debt is eliminated and you will be free of debt completely. This may take several years and you need to be in contact with the attorneys all through! You will lose your credibility and you will also lose your credit score. This situation stays for 7-10 years and during this period, you cannot get any further credit from any creditor.

Now that you know the different popular debt relief strategies, you can choose the one most suitable for you!

Debt settlement is the best alternative to filing bankruptcy and the new regulations have made the process a much better deal for consumers.

Popular Debt Relief Strategies - Which Are You Eligible For?

By: Benjamin Axel

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