One of the most harrowing phases of life is when you are faced with a financial crisis. When creditors start calling about late payments and bills are turned over to debt collectors, you start worrying about your future. Everything becomes uncertain, and your life comes under this black cloud of stress. Whatever may be your situation, debt management solutions are the way out. There are many options to consider here, and one of them will surely be of some benefit to you.
Check out some debt management solutions here:
Here the debtor himself takes control of his financial conditions. You have to start by controlling, your spending by setting up a monthly budget and then directly contacting creditors to make arrangements for paying off the balance amount.
If your credit rating allows, you can consolidate your unsecured debt with a second mortgage or a home equity line. This may not sound like a feasible option as it becomes risky because if you falter on your payments, then you might lose your house. So, a safer option is to take the services of an accredited credit counselling agency and they devise a debt management plan (DMP) for you. A DMP consolidates your debt without requiring any additional borrowing.
Debt Reduction Service
Here you can take the services of a debt settlement Company, negotiating with your creditor for a settlement of the debt. You are required to pay a lump sum on a balance that is less than the full amount you owe to the creditor. Debt settlement programmes seem like a good option, but there are a few problems you may have to face if you go for this method. The negotiated lump sum is due in full when the debtor signs an agreement, and the creditors are not obliged to honour the terms of settlement. The amount forgiven by the creditor is liable for taxation. Settlement reduces your credit score and is shown on your credit report for seven years, which makes it difficult for you to get loans for this number of years.
This option should only be considered as a last resort because it causes further hardships to you. A bankruptcy will be on your credit report for 10 years and this will create problems in getting a new loan and even a new job. Many employers check the candidate’s credit records and make hiring decisions on the basis of the credit records of the candidates.
Debt management solutions can help ease your stress by reducing some amount of debt pressure off your credit records and thus reducing your stress.
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