In an economy where thousands of Americans are experiencing difficulty in paying their bills each month, many of us are searching for debt relief options to lighten our financial burdens. Even the most financially responsible U.S. citizens find it difficult, or sometimes impossible, to maintain their life savings when some unforeseen event occurs such as a divorce, a serious illness, injury or job loss. Just one missed credit card payment, late mortgage payment or other bill can result in a downward financial spiral that increases indebtedness, interest rates, and late fees. Thus, having some debt relief options available when finances are strained becomes imperative to keeping your financial future stable.
Debt Collection Attorneys Can Help You Determine Which Debt Relief Option is Right for You
The top three debt relief options that debt collection attorneys most often suggest to clients are credit counseling, debt settlement, and bankruptcy. Each of these relief options has advantages and disadvantages, but all can provide valuable assistance in relieving financial burdens. Your best resource for determining which method will meet your needs is an experienced fair debt collection attorney who can help you decide what option will work best for your particular situation. There are many qualified attorneys that offer a free, no obligation debt help consultation and financial review.
Below you will find a brief description of the top three debt relief options most consumer attorneys advise clients to consider when experiencing difficulties in meeting monthly financial obligations.
Credit counseling – An option for people who need moderate relief from monthly payments, credit counseling may be all you need to get your financial situation under control. Credit counseling is available through professionally licensed individuals and companies and may be the first step in determining the level of assistance that is required to bring finances back on track. Sometimes a budget is created by the counselor along with a recommended change to the previous payment schedule and this could be enough for those with minor debt issues.
Debt settlement – A relief option that helps debtors settle overdue financial obligations for less than the amount originally owed and relatively quickly. The settlement option involves the negotiation of unsecured debts for a dramatic reduction in balances owed on credit accounts in exchange for guaranteed regular payments on the account. Debt settlement plans and payment negotiations are typically used for credit card balances, medical bills, signature or personal loans, lines of credit, deficiency loan balances from prior vehicle repossessions, collection accounts, lawsuit and or judgments. If you are receiving calls from collection agencies regarding overdue balances, debt settlement lawyers can negotiate on your behalf with creditors and debt collectors as well and this can stop the collection calls and letters.
Bankruptcy – Bankruptcy as a debt relief option is the most extreme or final option. Bankruptcy law allows debtors to pay creditors through supervision of their assets by a trustee or by liquidation of assets to satisfy financial obligations. Bankruptcy filings fall under Chapter 7 or Chapter 13 of U.S. Bankruptcy laws. Chapter 7 is commonly filed by consumers with low or little income, very few assets and a large amount of debt. When a consumer files bankruptcy under Chapter 13, a repayment plan is established with a 3 to 5 year payback period. This option is often preferred by consumers attempting to keep their homes and avoid foreclosure.