Debt Relief Options - Help is Available
Credit card debt is a serious problem for many residents in North Carolina as well as in other states. If you are also struggling with credit card debts and are in need of debt relief - there is good news is - help is available. Also, there are a variety of debt relief options available - whether it's in the form of debt consolidation (or a debt management plan or DMP), debt settlement, or even bankruptcy.
What debt consolidation typically involves is combining your high-interest credit card debts, and other types of unsecured debts, into one, more manageable and more structured monthly payment made to a credit counseling agency.
Debt settlement, on the other hand, is where consumers are hoping to settle with creditors for substantially less than what they owed. Both debt consolidation and debt settlement have become popular alternatives to bankruptcy which can have a more damaging and longer lasting impact on personal credit.
Explore your debt relief options. Get a free debt relief estimate and savings analysis, at no obligation to you.
How Debt Consolidation Works
As previously mentioned, you have choices when it comes to finding debt relief; one of those choices is a process known as debt consolidation or a debt management plan. When you enroll in a debt management plan, credit counselors will review your financial situation and assess your ability to pay your debts. Once your credit counselor has all the necessary financial records, he or she will typically develop a strategy that may help you pay down your debts sooner than if you only continued to make your monthly minimum payments at higher interest rates.
Your credit counselor will typically speak to your creditors, on your behalf, asking for reduced interest rates, elimination of any late fees and penalties, and generally ask for more favorable repayment terms. Creditors who agree to the proposals will be placed into the debt management plan.
The goal of debt consolidation is to provide you with a more affordable and more structured payment plan that will allow you to pay off your debts at, hopefully, a pace that you are comfortable with. In many cases, credit counseling agencies may even provide you with a due date (the date when they automatically debit the account they set up for you) that takes into consideration, for instance, when you get paid or have the funds available in the account.
Explore your debt relief options. Get a free debt relief estimate and savings analysis, at no obligation to you.
Debt Consolidation vs. Debt Consolidation Loans
To get debt relief, many individuals might consider enrolling in a debt management plan or a debt consolidation program, which as previously noted, typically involves combining one's multiple debts into one, more manageable payment made to a credit counseling agency.
Many consumers might also consider getting a debt consolidation loan, which involves combining or consolidating one's high-interest debts into a single, lower interest loan. If you are thinking of applying for a debt consolidation loan, it's important to consider the potential risks:
With a debt consolidation loan you will typically combine your high-interest credit card debts into a single, lower-interest loan. This loan is generally considered a "secured" loan, or a loan that is tied to some asset or property, such as your home.
In many cases, if you default on the terms of your loan, you would have essentially put your home at risk. In addition, many people who get debt consolidation loans typically accumulate new, high-interest credit card charges all over again. In these cases, they now have to manage new, high-interest charges on top of their monthly loan payment.
The bottom line is, whether you seek debt relief via debt consolidation or a debt consolidation loan, it is smart to do your due diligence. Make sure that you thoroughly research a potential company's background and ask thorough questions.
It is also important that you understand how much money you can potentially save, when you are likely to realize those savings, and the potential impact to your credit score.
Begin online to get your free personal debt relief evaluation and savings estimate
