In an effort to effectively eliminate your outstanding personal debt, you generally have five options to choose from. CreditArbitrators recognizes making a decision can be tough. Our Specialists are here to educate you and help you make smart decisions that are in your best interest, every step of the way.
You want to take action in getting your debt under control. You need your options explained simply and directly. Take a look and compare the options that are available to you.
Bankruptcy may seem quick and simple, and many people file for bankruptcy each year failing to realize they will be forced to deal with the harsh effects that will plague them for the rest of their lives. One must first be aware that bankruptcy does not fade away after 7-10 years as bankruptcy attorneys claim. The reality is almost all credit applications ask if you have ever filed bankruptcy, and to answer falsely is considered a federal offense. Also, costly court and lawyer fees all accompany the process of filing for bankruptcy.
With recent changes in Bankruptcy laws, many consumers will not be able to eliminate their debt simply by filing for Chapter 7. Many consumers are now required to file Chapter 13, which requires you pay back a portion of your debt under the supervision of the court, which may last for years. Bankruptcy should be discussed with a trained legal professional before consideration.
Taking out a debt consolidation loan
Borrowing money to pay off borrowed money doesn't add up. A debt consolidation loan works the same way. Essentially, a lending institution will provide a homeowner with a home equity loan that will help "consolidate" his or her outstanding debts into one monthly payment. The homeowner can benefit from a lower overall interest rate and tax break; however, many consumers' financial situations worsen at this time, causing them to unfortunately lose their home.
If you don't own a home with enough equity, this may not be an option at all or if you have less than perfect credit, your rate for this type of loan may be similar to your current credit card rates.
Mediate your debt
Consumers need an honest means of dealing with their credit problems efficiently while maintaining their financial integrity. Debt mediation involves a personalized budgeting plan that will effectively enable a Debt Negotiator to negotiate a compromise with creditors that actually resolves the debt for less than the outstanding balance. Now the credit companies are happy with the money they receive, as opposed to receiving nothing in some bankruptcy situations, and the consumer is happy they are able to reduce their total outstanding credit balance for less than what they owe.
The savings payments are typically lower than your current monthly payments would be, and most people complete the program in 36 months or less. Your results may vary depending on your circumstances.
Many choose to live with their debt or ignore their growing financial problems, but their life will never change. In fact, debt is not a stagnant problem – debt continually multiplies. To make a change in your life, you must take the proper actions.
It's time to call the professional and experienced Specialists at CreditArbitrators who will work for you, so you can get on the right path to settling your debt and get on with the more important things in your life.
Consumer Credit Counseling Service
CCC organizations are usually designated as non-profits by the IRS, although many of these firms recently lost that status because the IRS felt that had "for profit" motives. These organizations combine your payments to one monthly payment, where you pay back all of the principal, some interest and some fees. Many CCC organizations receive funding from creditors as well as payment from their clients.
Many times these programs are generally drawn out over four to six years and fewer than one out of four actually completes the program. Often these payments are higher than the original credit card payments and this program can have a non-flattering effect on your credit.