The Best Debt Relief Options Of 2010 - Credit Counseling Vs Debt Settlement Programs

There are several debt relief options available to a US consumer who is not in a position to repay his or her unsecured loans

. What are the best debt relief options of 2010? The loan relief instruments of 2010 include debt settlement, debt consolidation, debt management, debt or credit counseling and bankruptcy.

Federal government has now made it mandatory for the consumers to first qualify for bankruptcy. This means that the debtors having large amount of unsecured debts are required to first go for means test or they need to face a credit counseling session with the credit counselors who are appointed by the law.

In the means test, it is checked if the average monthly income of a person is less than or greater than the median monthly income of the state. If it is above the median monthly income of the state then the person will need to go for means test.

Consumers who do not have income above the median income of the state, they will be asked to go for credit counseling where the credit counselors will judge the consumer on the basis of the income that they have and the expenditure pattern that they follow. The counselors will try to come out with a solution for the consumer. In case of every option failing, the consumer will be allowed to go for bankruptcy filing but not before that. Bankruptcy has a number of legal hurdles. It also takes more than 5 years to get over. The debtor can not take fresh loans for 7 to 10 years after bankruptcy. So this debt relief method does not qualify for the best debt relief options of 2010.

In settlement, anyone with a debt of $10k and above can qualify for the process. The professional negotiator from the settlement company negotiates with the creditors on the behalf of the consumers and then eliminate the debt that they have by at least 50% and sometimes the elimination can reach up to 70%.

Therefore, it can be summarized that the best debt relief options of 2010 certainly consist of loan settlement program.

With the new FTC laws recently passed, debt settlement is a legitimate alternative to filing bankruptcy. Creditors are ready to negotiate and now you won't have to pay a fee unless your debts actually settle. Check out the following link to locate legitimate debt relief companies in your state for free help.

The Best Debt Relief Options Of 2010 - Credit Counseling Vs Debt Settlement Programs

By: ketty archer

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