No matter what type or amount of debt you are in we understand that you want to get rid of it as quickly as possible. So what options do you have to eliminate your debt? Here is a quick overview of the top three ways to handle your debt:
1. Bankruptcy
There are two main types of personal bankruptcy: Chapter 7 and Chapter 13.
The first, Chapter 7, is most beneficial to individuals or families with high amounts of unsecured debt (credit cards, medical bills) and low amounts of assets (paid in full homes or vehicles). Chapter 7 can eliminate most types of unsecured debt and give the debtor a fresh start.
On the other hand a Chapter 13 bankruptcy involves a 3-5 year repayment plan in which the court allows the debtor to pay back a percentage of their overall unsecured debt. This type of personal bankruptcy is best for individuals or families with high incomes.
2. Debt Settlement
Before the negotiations begin there is typically a period where the debtor is asked to deposit money into a new savings account set up for the sole purpose of achieving the debt settlement. Many debt settlement companies do not require payment until the settlement is complete.
The main difference in debt settlement and bankruptcy is that the lenders are not obligated to agree to any sort of reduction in a settlement program, but a bankruptcy is court ordered.
3. Credit Counseling
In a credit counseling program the debtor pays a financial advisor to evaluate their situation for them. In many cases these advisors have worked in finance for 20+ years and just enjoy helping people budget.
Don’t let your debt get you down; there are options and you just need to find the right one for you! If you know friends or family who have gone through any of these three options then ask what they thought of how it helped them get out of debt.
The great thing about all three of these options is that because they are all so popular you can find information on them online, in books, or in magazines anywhere. In fact, many bankruptcy attorneys, debt settlement firms, and credit counseling companies even offer free initial consultations.
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