Buried in Debt and Need Relief? What Options
Are you currently having problems in repaying all you monthly dues? Are you credit card debt piling up faster than you ever imagined? You do not know what to do with all your debt? Well, there are a certain number of options which you can choose from.
The first option which you can consider is to do nothing. Well, this is a practical option and more people choose this one. But, it would not be long enough before you realize that your debt is going out of hand and will be destructive for you in the long run.
The second option for you is to opt for credit counselling. How does credit counselling work? When you enrol in credit counselling, you make a single payment monthly to your credit counselling agency. In your behalf, your credit counselling agency does the payment to your creditors, ideally on lower interest rates. Well, the existence of these credit counselling agencies has encountered criticism throughout the years. Why? This is because most of these companies claim that they are non profit. Even though agencies claim that they are non-profit, this does not guarantee that in reality the services they provide are free or affordable, or even legal. It is important to know the downside of credit counselling. Other credit counselling agencies do not make payments on time which in effect results to paying late fees and a bad credit record. Getting credit counselling does not assure you that the creditors will agree to lower your interest. Credit counselling also appears on your credit record and this may be viewed by some lenders negatively and may affect your capacity to borrow other loans.
For your third option, you can go for debt settlement. For this option, a company negotiates for you as well. But, it creates a program which will allow you to pay your debt in an affordable manner and you will find yourself debt free in 16-39 months time.
Fourth option is to file for bankruptcy. A bankruptcy will be reflected on your credit history for a time span of 7-10 years. Even after this is removed, you must still disclose that in future loan applications. If you are seeking employment, it must also be disclosed or if you lie about it, that can be considered a crime. Declaring bankruptcy may seriously affect your credibility as a borrower.
Another option is debt consolidation. Here, you have to take a loan which will be able to repay the consolidated amount of all your loans.
