So you’re ready to get out of debt once and for all.  The question is, how do you do it and what options do you have.  I’m going to share the options available to you as well as the pros and cons of each. 

Debt Consolidation

Whe you enroll in a Debt Consolidation Program, you are hiring someone to help you get out of debt and coach you back to financial health.  They will work with you on a one on one basis and help you establish a budget and a plan to get out of debt.

PROS:

• Lower interest rates on your credit cards. 
• One REDUCED monthly payment
• Stop harrassing creditor phone calls
• Eliminate your debt in just 3-5 years!

CONS:

• Pay back the full amount owed
• No room for error - If you are late or miss a payment, the creditors will remove you from the program
• Accounts will be closed by the creditor

Debt Settlement

When you enroll in a Debt Settlement program, you are hiring a team of Debt Negotiaion Specialist to work with your creditors and settle your debt for less than what you owe.  Debt Settlement is an excellent option for someone who has fallen behind on their monthly payments an is trying to avoid bankruptcy.  You can include unsecured debt such as Credit Cards, accounts in Collections, Repos, and Medical Bills in a Debt Settlement Program.

PROS:

• You will eliminate your debt for much less than what you owe
• You only have to make one small monthly payment
• It will improve your credit over time much faster than going through bankruptcy

CONS:

• May hurt your credit score
• Creditors may continue to call you
• Debt Settlement cannot help with secured debt such as a home or car loan

Bankruptcy

Bankruptcy is the process of declaring yourself unable to pay off your debts.  This does not mean it will get rid of all of your debt but most of it.  The typical bankruptcy for consumers is Chapter 13.  This is where lawyers will negotiate with your creditors and collection agencies to pay back less than what are owed.

PROS:

• You pay less than what you owe.  The typical amount you will pay back on any certain debt will be anywhere from 30 to 80 cents on the dollar.
• They work a payment plan out for you.  This will allow you to creditors back over period of time.

CONS:

• Hurts your credit for the next 7 years from the point of discharge.  You will not be able to get a loan of any kind.
• Costly.  Bankruptcy can cost a lot of money.  If you’re already in a lot of debt it may be tough for you to come up with the money to even go through this process.
• Bankruptcy is also very time consuming.  Don’t expect the process to go very fast.  In most cases it will take several years to pay back all of your debts.

Would you like to learn more about what option is right for you?  Our Solutions Specialist can work with you to determine which option best fits your financial situation. 

For a FREE no obligation consultation,

give us a call TODAY!

1-877-492-4109

photo by: Helga Weber