Learn the basics of how debt relief programs work:
Raise your hand if you’ve ever been confused by money. Odds are, everyone has had questions from time to time. And when you find yourself owing a lot of money, it can feel even more confusing. It can feel stressful, discouraging, and overwhelming, but a lot of that stems from confusion. We simply don’t know what our options are and if there is something else we should know about or be considering. Education is key when it comes to understand how debt relief programs work!
How do debt relief programs work?
Debt relief programs are various strategies that creditors, lawmakers, attorneys, financial experts, and consumers may work together on to help settle a debt. That debt can be resolved in a number of ways and each way has its own pros and cons. It’s important to realize that debt relief is not a one-size-fits-all type of thing and each situation requires different strategies. That’s why it’s important to talk to a financial expert or attorney to know what your options are. It’s also important to understand the various risks and costs associated with each option. Let’s take a quick look at the major options for debt management and debt relief:
- Debt Consolidation: Debt consolidation is a financial strategy where multiple loans are combined into one big loan. This is a great option for people who have lots of small loans with varying deadlines, interest rates, and contacts. Often, the mental ease that ONE loan provides can be enough to help someone out. Your focus is then on one number to pay down, with one interest rate, and one deadline each month for payments. For example, this can be extremely helpful when large medical bills come in from multiple locations, doctors, and departments for a single problem. Putting these into one main loan can be a huge lifesaver for people, allowing them to focus on just one loan. It doesn’t mean you don’t pay off the total amount, and it doesn’t mean you get to forgo interest payments, but it DOES mean that you consolidate and focus your attention. Debt consolidation can be a great option for many consumers who have unsecured debt!
- Bankruptcy: One of the popular debt relief options is bankruptcy and this can often be seen as a last resort option. Bankruptcy comes with a few obligations to help pay the debt, which may include liquidating assets, setting up payment schedules, and almost always includes a sizeable ding to your credit score. Bankruptcy is truly a last resort option for many people because of these things. If possible, consolidating or even settling your loans can help you get on a good foot moving forward. That said, sometimes bankruptcy is really the best option. If you’re considering it, always talk to an attorney who can help you navigate the technical and legal matters associated with filing.
- Debt Settlement: One of the best options for debt relief is debt settlement. This strategy includes seeking the advice and support from a debt relief company like us. That company will work on your behalf to negotiate a lower amount to pay out on the total debt. This amount is often lower than what you originally owed. While this can take some time and there are some fees for the negotiation, this is a wonderful option for many consumers, especially when the debt is simply spiraling out of control.
- Credit Counseling: One of our favorite solutions for consumers is counseling. These are educational classes that can help you, as a consumer, become more money-smart! We believe that education is power and if you can embrace some basic money principles, you can set yourself up for success in the future. Ongoing debt does not need to be the story of your life. If you are in debt now, know that it doesn’t need to be a reality for your tomorrow. Often, a little education can go a long way!
At DebtQuest USA, we are here to help you understand your options. We want you to find solutions to get your debt under control. Ultimately, we want you to focus your attention on things you really love in life and are passionate about, rather than debt. Debt does not need to rule your life any longer. If you are feeling overwhelmed by the load that your debt is putting on you today, please reach out. We’re always here to help!