subject: Card Debt Relief - Is Their A Single Solution To Debt Relief [print this page] Card Debt Relief - Is Their A Single Solution To Debt Relief
There is no single solution to debt relief although the most popular for debtors with very high debts is debt settlement. However before opting for settlement one should look at options like debt consolidation and loan conversion. Under debt consolidation, a number of different loans are paid off with a single loan. With a little research in the market, you can find a financial institution which gives such consolidated loans at lower interest rates compared to what you may be paying on your various loans.
This not only reduces the amount you have to pay in monthly instalments, it also makes the payments more manageable. Then there is conversion of loans in which unsecured loans are converted to secured ones by offering collateral against them. As a rule secred loans have a significantly lower interest rate compared to unsecured loans. This also reduces the burden of debt considerably.
If however your unsecured debts are more than $10,000 then the best option for you would be to apply for a debt settlement program. You can undertake the settlement procedure yourself or hire the professional services of a debt settlement company. Under a settlement procedure the creditors are requested to reduce the laon amount. Good negotiation can bring about about 50% reduction in the amount payable. You can then pay off this amount as a lump sum which is more advisable as it makes you debt free immediately and saves you the interest that you would have to pay otherwise.
If however you do not have the means to pay off the amount at once then you can pay it off in monthly installments. However the interest rate on these instalments can be negotiated and reduced. The creditors can also be persuaded to waive off the late payment and non payment charges. This procedured brings down the burden of debt to almost half of the original amount payable. In fact many debt settlement companies combine settlement, consolidation and loan conversion to give the maximum benefit to the debtors. Even though the credit scores are impacted negatively by a settlement the damage is not irrepairable.
