subject: Credit Card Debt Elimination [print this page] Whether your unsecured debt problems are large, small or somewhere in-between, you should know that there are various debt relief solutions available that are designed to give you the help you need. Contrary to what you may have been led to believe by overzealous advertisers, there is no such thing as a one size fits all debt relief program. Instead, the variety of available programs provides a suitable mix of benefits and weaknesses that can be applied appropriately to almost any given debt situation. By understanding the basic characteristics inherent in each type of program, the consumer can judiciously choose the proper level of assistance while at the same time minimizing the accompanying downside.
There are 5 basic types of debt relief solutions, listed here from conservative to extreme:
1.Budgeting and saving
2.Debt consolidation loan
3.Debt management (Credit counseling)
4.Debt settlement
5.Bankruptcy
For debt problems that are anticipated or are just beginning to emerge, budgeting and saving are likely the best solution and carry no associated financial penalty. Debt consolidation loans are virtually non-existent these days, but if you can utilize a home equity line of credit (HELOC) you can probably lower your interest rates and possibly gain a tax advantage. The serious downside here is that in exchanging unsecured debt for secured debt, you could put your home at risk. Debt management provides just moderate assistance and does not affect your credit score, however notations are made on your credit report which may make some lenders wary. Debt settlement provides substantial relief and may be a better choice than bankruptcy, as the included accounts are typically settled at 40% to 60% of their balances, debt can be eliminated completely in 12 to 36 months and interest charges cease. Temporary credit score damage occurs, however most borrowers that require this level of assistance already have compromised credit. For the most desperate debt situations, Chapter 7 and Chapter 13 bankruptcy offer a legal avenue to pursue debt relief, however the disastrous consequences to your credit can last from 7 to 10 years.
As you can see the debt relief programs available are quite varied, and there are some real decisions to make if you need to avail yourself of a debt relief solution. Your best move is probably to speak with a debt professional first to properly assess the situation youre facing.
