Debt Relief Options
Are you one of the many Texans and Americans alike who are in need of reliable debt relief options and ways to reduce your credit card debts and other types of personal debts? If so, you may be interested in finding out how much you can potentially save - every month - with debt consolidation.
Debt consolidation involves combining, or consolidating, your credit cards and other types of unsecured debts, such as medical bills, retail store charges, or utilities, into one, more structured, and more manageable payment plan made to a credit counseling agency. Credit counseling agencies, in turn, distribute funds to individual creditors in the debt management plan (DMP).
Keep in mind, however, that debt consolidation is just one of a variety of debt relief options available to residents in Texas and nationwide. Your debt relief alternatives can also include debt consolidation and debt settlement, which have become popular alternatives to bankruptcy, which is generally the option of last resort for many Americans, and has a more devastating and longer lasting effect on one's credit.
With a free debt relief analysis and savings estimate, you can find out how much savings you can get with debt relief.
How Does Credit Card Debt Consolidation Work?
When you enroll in a debt consolidation program, credit counselors make an assessment of your debts, income, and other financial obligations. When they have a clear picture of your finances, they typically develop a strategy and submit proposals - on your behalf - to creditors asking for lower interest rates and the waiving of late fees or other penalties. Generally, credit counselors ask for more lenient payment terms to help you direct more of your funds into paying off the principal on your debts versus just the interest.
As mentioned earlier, the goal of debt consolidation is to provide you with a single, more manageable, and more affordable payment plan so that you can reduce your debts sooner than if you only continued to make the minimum payments at higher interest rates. That's why it is a smart move to find out how debt consolidation can help you reduce your debts. Request a free debt relief analysis and savings estimate. Start here.
What is Debt Settlement?
While many consumers do find relief by consolidating their debts, others might have a completely unique debt situation that may qualify for a debt settlement program. Unlike debt consolidation where you are paying the entire amount of your debts, just at lower interest rates, with debt settlement - you are hoping to settle for significantly less than your original debt amount. However, like other debt relief options, debt settlement can potentially harm your credit.
When you enroll in a debt settlement program, you are hoping to settle with creditors for significantly less than what you owe. However, as the term "debt settlement" suggests, creditors are certainly not legally required to accept your settlement offer. In addition, many debt settlement agencies typically advise consumers not to make their credit card payments and instead, save money over a certain period of time and later use those funds to make a reasonable settlement offer.
When consumers don't make their payments, they are essentially defaulting on the terms of their credit card agreements and could potentially be sued by creditors in an attempt to recover their losses. Many consumers also typically see their credit scores dip, as a result of defaulting on their credit card agreements. But as noted earlier, many consumers have made debt settlement a popular alternative to bankruptcy - which has a far more damaging and longer lasting impact on personal credit.
How Much Can I Save With Debt Consolidation?
Because every individual's situation is unique, the amount you could potentially save with debt consolidation depends on the amount of your debts, the current interest rates that you are paying, and how much creditors are charging you in late fees and penalties. That's why it's wise to find out what a debt consolidation company could do for you and how long it will likely take for you to become debt-free.
Learn more by requesting a free debt relief analysis and savings estimate - at no obligation to you.