subject: Debt Relief Solutions-Know Your Options [print this page] The easy reality is that when you are struggling with debt, no matter what the cause of the dilemma was to start with, overcoming that debt becomes your greatest importance.
A large amount of debt can keep you from the style of living you're used to. And, if left excluded, can create further predicaments.
When credit card debt (or any other type of unsecured debt) has become an obstacle, the most vital thing you can do is to be proactive. Disregarding the crisis will only make it worse. You need to work to find the right debt advice, and then work to defeat the problem entirely.
With that said, let us talk about 5 options you have to overcome your debt problems.
Advice Debt: 5 ways To defeat Credit Card Debt
When you've realized that debt has turned into a problem, the most vital thing you can do is to work towards an answer.
You mostly have 5 ways to get rid of credit card debt, and we'll give an essential overview of all of them here.
Pay It Off
The first option you have is undeniably to pay your debts off. The difficultly with this is that by the time debt is a serious dilemma, this simply isn't a choice for most people.
Debt Consolidation:
Your next choice is to take out a debt consolidation loan. This may be a good selection if your current debt load is still doable.
What Is Debt Consolidation?
Debt consolidation is the process of bundling all of your debts together into one payment by taking out a consolidation loan. The key term here is loan.
To actually be considered debt consolidation you take out a consolidation loan. Most often this is a secured loan that uses your home (or some other property) as security for the loan. Although, there are unsecured consolidation loans as well, the easy reality is that by the time debt has become a difficulty, most won't qualify for this type of loan.
Because a consolidation loan uses your home as security, deciding when this type of solution to debt is applicable is critical.
Advice on Debt Consolidation: When It's applicable:
Debt consolidation is an applicable explanation if you meet the following two criteria:
1. You own your home and have at least some equity in it.
2. You don't have a huge amount of debt.
There are a couple reasons why you ought to only contemplate this type of debt relief if you meet BOTH of those criteria, but it's the second criteria that is the most important.
First, if you have a larger amount of debt, a consolidation loan can essentially make the difficultly worse. Rather than taking care of your debt, you end up extending the dilemma by taking out a long term consolidation loan. Instead of paying off your debts, the payments are abruptly lengthened for 10 years and worse yet the interest on a 7 to 10 year loan can almost double the amount you pay.
Next, since your using your home as collateral, if you do choose a long-term consolidation loan you are putting your home on the line for the next 7 to 10 years. If, for any purpose, you end up in a position where you can no longer meet the payments, it isn't just you that will experience problems; it's your entire family when you lose your home.
For those reasons, consolidation is most applicable for those who have a smaller amount of debt that can be paid off in less than 5 years once it is consolidated.
If you don't meet these requirements you may want to consider debt settlement as a solution. Since settlement essentially reduces the balances due, it is a much better selection for those with a large amount of debt.
The next selection you may want to look at is debt settlement. With this selection a professional debt counselor arbitrates down the actual balances of your unsecured debts.
This selection is the most applicable for those with more than $10,000 in debt, simply in light of the whole process is over faster.
Where a consolidation loan can take 7 to 10 years to pay off, and it puts your house on the line as security, a debt verification plan is usually finished in half the time.
The finest way to learn if settlement is the option that fits your needs is to start with a free consultation.
Debt Management:
Next on your list of alternatives is debt management. This selection is sometimes referred to as debt consolidation, but don't be fooled. Debt management is a way where your interest rates are reduced, credit card accounts are closed and then a debt counselor works to formulate a payment plan with you.
In general this selection isn't endorsed. If you could afford to pay off your debts you probably would not need a debt management program.
When it comes to advice on debt consolidation, sometimes it's not the best thing to contact the professional debt consolidators. They lean to push the notion of consolidating, and the simple actuality is that consolidation isn't necessarily the desirable answer for everyone.
By knowing when a consolidation loan is applicable, you'll better let yourself to decide which explanation is right for your solution to debt.
To get started let's first talk about what debt consolidation is and isn't. Some deceitful debt companies have recently started selling services like debt management as consolidation, and this can be very misinforming to public.
Bankruptcy:
Your last selection is bankruptcy. This selection should only be sought after all other advice-debt results have been taken into account. Bankruptcy will hurt your credit rating for life (not just a short period like consolidation or settlement), and with the changes to bankruptcy laws in 2005 it doesn't always work to get clear of your debts; you could end up paying most of them off anyway!
To find the right option for you just click the following link. http://www.ccdebtrelief.org/
