Financial Updates

Are you in severe debt crisis? At first, stop worrying about it and then start working on a debt relief plan that can help you pay off all your bills/debts in a systematic way. You can take professional help if you’re not able to clear your dues on your own. Read on to get a brief idea on debt solutions – how professional debt relief options help you pay off your debts and get your finances back on track. 

Here are 4 professional debt relief options that help you pay off your multiple bills/debts.

1. Credit counseling session : You should first go for a debt/credit counseling session whenever you start facing debt problems. In such a session, a credit counselor examines your financial condition and offers suitable suggestions to manage your debt properly. A counselor may also prepare a personalized debt relief plan for you by following which you can pay off your dues completely.

2. Debt management plan : A credit counseling organization may offer a debt management plan to you if suggestions and tips are not enough to pay back your dues. In a DMP or a debt management plan, a counselor, on behalf of the organization, negotiates with your creditors to reduce your loan interest rates. With your creditors’ approval, the counselor also finalizes a monthly payment that you need to pay towards clearing your multiple bills/debts. Thus, you can get rid of your debts with the help of professional guidance.

3. Debt consolidation program : There is not much difference between a debt management plan and a debt consolidation program. The only difference is that a consolidation program is usually offered by a consolidation company whereas, debt management plans are generally offered by credit counseling organizations. In a consolidation program, a debt consultant (on behalf of the consolidation company) negotiates with your creditors to reduce the interest rates on your loans, decides upon a monthly payment and gets it approved by your creditors. When you make the agreed upon monthly payments to the consolidation company, it distributes the amount amongst your creditors on your behalf.

4. Debt settlement program : You can take help of a settlement program when you have huge debts to pay off. In such a program, the settlement company negotiates with your creditors to reduce the amount that you owe to them. In most cases, the settlement companies can reduce the outstanding balance to about 40-60% of what you owe. In the meantime, the company asks you to stop paying your creditors for the time being and instead deposit an agreed upon monthly payment to a settlement account. You need to use this accumulated fund to settle the debt as soon as one of your creditors agrees upon a reduced payoff amount. Thus, you can get rid of your debts one by one by paying less than what you owe.

You can take help of a debt consultant if you cannot make up your mind as which debt relief program may be best suitable for you to clear all your dues. A debt consultant can help you to get brief idea on debt solutions along with making you aware about the pros and cons of each of the debt relief programs.