What are the Available Debt Relief Options?

Owing money to a financial institution in the form of a loan, line of credit or credit card can be of great help to individuals, families and businesses when used properly. However, when used improperly, it could lead to financial ruin. It is not the amount of money you owe that equates to a healthy debt but how well you are able to balance your finances. You have to be able to pay your debt but not in the sense that it has become a burden from your income. In extreme debt problems, inevitable events like hospitalization, job loss and even theft can turn a balanced budget into a nightmare. Creditors, however, do not take these unforeseen circumstances in consideration. You have to pay up regardless.

When you are in dangerous debt situations, there is no time to delay. You have to take measures as soon as possible to avoid inflating your debt exponentially. If you are at lost at what options would best fit your unique financial situation, it would be a good step to consider looking into debt relief options to end your debt for good.

Debt relief are programs designed to help free up your budget on a monthly basis. These specialized program will help you payy off your debts in the least amount of time than just doing minimum payments.

Debt Settlement

Debt settlement works through a special monthly payment system towards a special purpose account wherein the debt settlement company negotiates with your creditors to reduce your total debt through a lumpsum payment. A good debt settlement company will be able to finalize resolutions for you and have you save as much money possible on each of your accounts at the least possible time.

Debt Consolidation

Debt consolidation has two types: through a credit counseling agency and through a debt consolidation loan.
A credit counseling may help bring interest rates from about 20% to about an average of 8-10%.
In a debt consolidation loan, your debts are combined into one single new loan where the original interest and fees are incorporated as well.

Debt Management

Often known as consumer credit counseling, debt management is a creditor sponsored program to help consumers pay back their debt.  the debts are merged into one single account. This is usually pushed with low interest rates. You are still paying everything in full with interest.

Weighing Your Options

In debt management services, you have to make one big payment per month. The company also often charges a monthly fee. This doesn't help you save as much. The advantage is that you are no longer paying towards multiple creditors as your agency pays them for you.
In debt consolidation, when the collateral for the loan is a property or your assets, you may be at risk for repossession if you fail to pay up on time. Also, a new loan would mean the original fees and interest are incorporated.

Lastly, debt settlement seems the best option among debt relief programs. In debt settlement, balances are negotiated with creditors to help you save even up to 100% off your original amount owe and specifically designed according to your budget so that you are able to become debt free as soon as possible than paying the minimum each month. Do take note that results vary.

If you want to learn more about debt settlement, check these resources:
https://www.investopedia.com/terms/d/debt-relief.asp
http://www.curadebt.com/debt-relief-programs/