Do You Feel That Your Debt Situation Is Spiraling Out of
Are You Aware Of The Fact That You Will You Be Paying Back Your
Debt For Decades, And That You Are Going to Pay Back Over Four Times The Original Balance In Interest Payments
If So Your Running On The Credit Treadmill!!
Depending on your situation you may be someone who qualifies to escape from this sinking
ship. Which would save you literally thousands of dollars and get you completely out of debt in as little as
2 years. To learn more continue reading...
Below are different options that can be taken to get out of debt:
Credit Counseling: Credit counseling can be a viable option for many as a
way for getting out of debt. The credit counseling agency will be able to lower down some of the interest rates and
then you only make one monthly payment to the credit counseling agency and they will disperse it to your creditors
for you. However in credit counseling you are required to pay back the full balance and more seeing as you are
still paying interest. Usually you end up paying back around 120-125% of what you owe. And their programs are
structered to take quite a long time to pay off when compared to debt settlment. In credit counseling you can
expect to be enrolled in their program for 5-7 years maybe more depending on your situation.
Bankruptcy: Some people simply do not have a choice when it comes to their
debt situation and the only way out is to claim bankruptcy. It is recemended to exercise every other possible
option that you can before considering this. A bankruptcy will stay on your credit report for up to ten years.
And with the new bankruptcy law that was passed in October of 2005 many people now do not qualify for chapter 7
which relieves you of your debt completely. Instead you will have to go chapter 13 and pay back however much you
possibly can. Which isn't determined by you in the case of chapter 13 the court takes complete control of
your income and determines how much you need for expenses and how much you can allocate to your creditors. This
option should be absolute last resort.
Debt Consolidation Loan: This option can be very deceptive for going this
route dosen't actually get you out of debt. You get a debt consolidation loan to pay off all of your other
creditors. However now you are in debt to whoever issued you the loan. Which leaves you subject to whatever
interest rate they may give you and often times they base that on your credit score, which will probably be low due
to having outstanding debt and possbile negative remarks on your credit report.
House Refinance: This option is very similar to a debt consolidation loan
but puts you at more risk. It can be benficial because now you can pay off all of your unsecured debt at once. But
in reality all your really doing is taking your unsecured debt and turning it into secured debt. Because now
you will have a much high mortgage to pay every month for years. Which as you should know if you fall behind
on the mortgage you will lose your house. And the real trap people never see until their stuck in it. Because
now you may find yourself with zero balances on all of you credit cards and think this is great. However you
are now going to have a much higher mortgage and an all to easy oppurtunity to get yourself in a whole lot worse
situation than you were in before. With the temptation of still having all of your cards with no balances and
ready to be charged up again. Once you get back into the credit card habit again you will forecast your
impending financial death. Imagine finding yourself stuck right back on the credit treadmill again but with a much
higher mortgage and a much greater risk of losing your home. Advice to anyone would be to really avoid
putting yourself in this situation for the possible outcome can be the worst of any option you may consider when
getting out of debt.
Do Nothing At All: This is perhaps the worst thing to do. For in the long
run you will owe alot more money because of charges, interest and fees. Your credit score will plummet.
Carrying alot of debt weighs your credit score down drastically. And risk the possiblity of being sued and having
your wages garnished.
Debt Settlement: Debt Settlement if handled professionaly and properly is a
process where most creditors will accept a settlement of alot less than what you owe saving you money and time.
However one must be wary for not all settlement companies are the same. There are standard debt settlement
companies and then there are law firms. Law firms are by far a much better choice for you have the power of
an attorney. With an attorney not only do the collectors have to end harrassment upon retention of the firm,
and deal only with the law firm and not the debtor. Law firms have a much stronger position when it comes down to
negotiations to the creditors which is where you will save thousands on what you owe. The difference between
the settlement companies and law firms are pretty big. A word of advice before signing up with any debt settlement
company or law firm is to do your homework and make sure the company is legitimate. Referring to organazations such
as the BBB (Better Business Bureau) can help to determine this. And as far as law firms go they are held to a much
higher quality standard, seeing as they are under the constant eye of the Bar Association of their state. So when
checking out a law firm be sure to check that states bar association to make sure they are in good standing
and perform the service they claim they can.