Many people today never thought they would be in financial difficulty. Then, because of an illness, or a divorce, a loss of job or any number of things, they have ended up in financial difficulty and in need of credit debt relief.
When they were bringing in the weekly pay checks, the large credit card bills and minimum payments did not seem to make any difference. But with a loss or reduction in income it may suddenly become impossible to meet even the the minimum payments and bills continue to grow from interest and late charges.
The worst thing a person can do when faced with a situation like that is to do nothing. Nothing can only make it worse until it gets completely out of control. There are other proactive options that are available for credit debt relief. The one we most hear of and probably the least desirable is bankruptcy.
As an individual, you are eligible for a Chapter 13 and possibly a Chapter 7. Both become a permanent part of your record and will follow you for the rest of your life. Bankruptcy may save you a little of what you owe but the way you pay it back will be out of your hands and in the hands of the courts. Avoid this unless you run out of options.
Another option for credit debt relief, if you are fortunate enough to own or have a large equity in real property, is a debt consolidation loan. In essence you either refinance or take out a second mortgage. The money you gain from this is then used to pay off your out of control debts.
The advantages are that your payments are now lower and your interest is now tax deductible. The disadvantages are that your payments are now spread out over 10 to 25 years and if you fall behind on this loan you can forfeit your property.
Debt settlement is growing in popularity as a viable means of credit debt relief. In this process you work with an experienced debt specialist to determine if you are eligible. You will need to meet a minimum criteria for debt.
If you qualify, you will declare your total debt and your income from all sources. The debt specialist will contact the people you own money to and negotiate a settlement that works for all. In most cases, it results in a substantial savings for you. Your debt specialist becomes your liaison with your creditors and you no longer have to deal with them. As long as you keep up your repayment program you are off the hook. Louis Zhang, Icreditdebtrelief dot com
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