The Different Types of Debt Relief Programs

      Comments Off on The Different Types of Debt Relief Programs

It is an easy task for us to get ourselves into debt than it is to get out of it. Every debt situation more times than not consists of unsecured credit products such as personal loans, business debt, medical bills, credit cards and numerous other financial dealings.

 

The issue is that there is no one-size-fits-all solution you can find to your dilemmas. To make sure your debts don’t get way out of your control, you need to take the bull by the horns so to speak.

 

You need to give some thought to the numerous programs that are available to you. Many institutions work with people in debt and have various options they offer up.Freedom debt relief is a company that offers some of these programs. Obviously, there will be some considerations such as the size, interest rate and type of debts that you have when you choose a debt relief program.

 

But, in order to choose the right one, you have to know the different types of debt relief programs that are offered these days. Here are some of the top ones:

 

Debt Consolidation

If your financial situation hasn’t turned too dire, you can give some thought to debt consolidation. High interest rates on credit cards are usually a contributing factor to the debt you have racked up. You can climb out of your financial hole by opting for a consolidation loan. This requires you to take out one big loan for paying off all your existing ones. In the end, you are left with one debt that has a low rate of interest and enables you to make greater payments towards reducing your principle. Freedom debt relief doesn’t have loan programs for people in debt.

 

Debt Settlement

You can achieve significant debt relief if you decide to negotiate with your creditors directly. If you have started missing payments, they are probably going to be willing to negotiate. Yes, this is going to have some damage on your credit report, but it does give you greater leverage during negotiations. You could negotiate a lower interest rate on the debt or you can ask to make a lump sum payment and have the remaining amount forgiven. The creditors are ready to listen because they would rather receive something than nothing at all.

 

This is a program that Freedom Debt relief does offer. So you can consider working with them on this.

 

Debt Management

Another popular debt relief program is debt management, which involves hiring a company to negotiate on your behalf with your creditors if you are unable to do so. Debt management services work with your creditors to come up with a reasonable repayment plan for you according to your financial situation. However, you do have to pay the cost of debt management services and it doesn’t have any guarantees so you need to be willing to take the risk.

 

Bankruptcy

One of the very last options at your disposal is to file for bankruptcy, but it can be effective in some situations. If a bankruptcy is successfully discharged, it will be able to wipe out your whole debt balance in just a few months as long as you are filing Chapter 7 bankruptcy. Also, a debt that has been discharged is not taxable.

 

But, the bankruptcy is going to be recorded in your credit report for about 10 years. Again, this is not an option offered by Freedom debt relief so you shouldn’t expect it from them.