Best 3 Debt Settlement Methods

Debt Settlement

Debt Settlement

Unfortunately the United States economy is still struggling and every day more people are finding themselves in financial difficulties.  Many are people who over extended in the good years, taking on too much debt and many people in trouble now are small business owners who have been hit by the downturn.  Others in trouble include people who just spend too much on their credit cards then lost their jobs or property investors who took a hit when the property market crashed.  Even the most responsible person can get into financial trouble when the economy takes a slide and it’s not necessarily something you should feel ashamed by.

With finance being so tight, it is becoming increasingly difficult to negotiate on your debts and even a single late mortgage bill can have serious repercussions on your financial well being now.

So lets check out the top three options that you need to look at if you find yourself in financial trouble.  They are credit counseling, bankruptcy and debt settlement.  Depending on the nature of your debt, you might find one, two or even all three of these options of great use to you as you struggle to get out of debt.  The best way to determine which if these methods you should be using is by talking to an expert in the matter, usually an accountant or a lawyer who is a debt settlement expert.  You can even find lawyers who specialize in debt negotiation who can give you a free consultation so take advantage of that if it’s available.

The first option is for people who need a moderate level of help in managing their bills, debts and credit cards – Credit counseling.   You can obtain credit counseling through any number of qualified financial planners, accountants or specialist credit counselors.  The counselor will help you create a budget which includes a plan for reducing your debt and managing credit card debt.  Sometimes they will combine debts or move debt from multiple credit cards to a single bank loan.  This tactic is really an early stage approach and is for people who see themselves heading towards financial disaster because of unrestrained spending.  The counselor will also create a payment schedule for you and can negotiate debt.

The next option is Debt settlement – a method by which experienced debt negotiators help you settle debt and negotiate better payment rates on that debt. The debt negotiator will create a payment plan so that you gradually reduce debts and in exchange, the creditor will usually reduce the total amount of debt so it is easier to pay back.  These kinds of debt settlement plans can be used with just about any creditor from credit card companies, hospital medical bills, vehicle repossession companies and debt generated from lawsuits.  This is especially useful when you start receiving calls from creditors demanding payment.  You pass on those details to the debt negotiator and let them create a payment plan for you.

The final option is the dreaded Bankruptcy.  It is considered to be the final resort in terms of escaping debt and should not be entered into lightly.  This is often referred to as Chapter 7 or Chapter 13 of the US bankruptcy laws.  Assets are usually liquidated to pay creditors and you are basically starting from scratch.  When you file for Chapter 13 you will have to negotiate a repayment plan that usually extends up to 5 years in length.  Essentially everything you earn within that period will go to creditors, but after that period you emerge debt free.  If you are considering bankruptcy you should seek the services of a lawyer immediately.

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