If you're searching for debt management solutions, you're not alone. Millions of people in Texas and nationwide are struggling with credit cards and other unsecured debts and this growing avalanche of debt is part of a debt crisis in America. So, where do consumers in need of debt relief turn for help?
While the government has offered certain bailouts and programs to assist banks and other financial institutions in debt, there is no government bailout that applies to consumers in debt. However, there is some good news, there are a variety of debt management options that are available to consumers, including debt consolidation, debt management plans, credit counseling, or even debt settlement.
Begin online by answering a few simple questions about your situation - and you will receive a free debt relief analysis and savings quote at no obligation.
How Debt Management Programs Work
When credit cards and other debts get out of control, your life can be quite stressful - with bills piling up, creditors calling, and no relief in sight. Fortunately, any of a number of debt management plans or solutions have been able to provide much need relief for consumers - and save a substantial amount of money as well. Here's a quick review of the programs and how they work to help consumers:
Credit Counseling Debt Management Plan
A credit counseling debt management plan can help consumers to combine or "consolidate" all of their credit cards and other unsecured debts into a single, easier, and more manageable payment each month. This "easier" payment is achieved if and when credit counseling companies, working on behalf of consumers, make individual proposals to credit card companies and other creditors, requesting that they lower interest rates, remove late fees and penalties, and generally allow consumers more lenient repayment terms. Upon acceptance, these creditors are, one-by-one, added to a debt management plan (DMP) which requires consumers to make one consolidated payment each month to the credit counseling company. This payment will then be distributed by the credit counseling service to each of the creditors. For individuals and families needing debt management advice, a credit card debt consolidation or debt management program can provide welcome relief by simplifying life, removing stress, and helping to get the consumer out of debt much faster than they could on their own if they were to continue to pay off debts at the initial higher interest rates and, in most cases, pay only monthly minimums each month.
Credit Card Debt Settlement
Another form of debt management is debt settlement. Debt settlement differs greatly from debt consolidation through credit counseling in several ways: Most importantly, with a credit counseling debt management plan you are paying back ALL THAT YOU OWE, just at an interest rate and pace that you can well afford. With debt settlement, you are NOT PAYING BACK all that you owe,but hoping to "settle" your credit card debt for substantially less than you actually owe. As the months go by, and you fall further and further behind on credit cards, debt settlement requires consumers to "set aside" funds that can be used to make a "lump-sum settlement offer" to individual credit card companies.
As the term implies, credit card companies have the right to settle, or not to settle, and while consumers are falling further and further behind on their obligations to pay credit card companies, they can potentially face legal action. In addition, one's credit can be impacted negatively as a result of non-payment. The bright side for consumers: While they are not making credit card payments each month, hopefully they are setting aside the necessary funds for a successful settlement. In the end, debt settlement has become an increasingly popular form of debt relief or debt management for consumers - because it can save a dramatic amount of money in some situations.
How much that is saved through settlement is largely dependent on the total amount of credit card debt, the actual companies involved and their policies to extend relief to consumers. There are certainly no guarantees and companies are not obligated by law to provide relief.
However, when you consider that credit card companies often decide to sell off what they consider "bad debt" or "uncollectable" debt to third-party debt collectors for as little as ten cents on the dollar, it should not come as a surprise that credit card companies may be quite willing to accept a reasonable settlement offer made by a consumer or on a consumer's behalf by a debt settlement company.
This may come as welcome relief indeed for consumers who already have credit problems and have fallen so deeply in debt that they are anxious to get out of debt as quickly as possible, without filing bankruptcy.
When comparing debt management plans such as debt consolidation or debt management through credit counseling and credit card debt settlement, many people consider credit counseling to be the more honorable form of debt relief, however in today's tough times, many credit card companies are likely to be quite receptive to reasonable settlement offers from consumers who are struggling to pay what they can, rather than resort to bankruptcy. Finally, for many individuals and families, bankruptcy in its own right should not be disparaged - as it may be the right financial decision in many cases if there are few available resources or income available to pay off a large amount of accumulated debt.
One additional note regarding debt management: It's important to note that many people in debt are tempted to take out debt consolidation loans to pay off high interest rate credit cards and other debts. While these loans can sometimes be helpful, they can also come at a high price as they can put your home at risk - should you default on terms of your debt consolidation loan.
To receive a free debt relief analysis and savings quote at no obligation, begin online by answering a few questions.