Debt Programs
Are you drowning in an ocean of debt? Is there somebody out there who’s going to throw you a life preserver? Do a simple internet search and you’ll find that there are millions of debt programs out there, but what are they all about? There is a lot of tricky terminology and some of these services are not exactly honest about what they do. Here’s a quick guide to debt programs and the pros and cons of each.
Get It All Straightened Out – Credit Counseling And Debt Management
There are people who can help, and their service is totally free. These debt programs are called credit counseling or debt management. They won’t wave a magic wand that’ll make your debt vanish into thin air, but they will help you get your finances straightened out and teach you how to be more careful in the future. What these debt programs specifically do is make a debt management plan for you after looking over your finances. They make your budget with you and offer loads of invaluable information on handling your finances. Some may even negotiate with your creditors on your behalf. These are often non-profit organizations who perform this service either free or for a small fee.
The Downside Of Credit Counseling
The downside is that they can’t actually make your debt disappear. They have little power to do much for you other than create a budget that will get you debt-free in five years. However, with just this free service, many financially desperate folks have overcome their money troubles.
Turn All Those Little Bills Into One Big One – Debt Consolidation And Debt Settlement
These debt programs call themselves either debt consolidation or debt settlement. What they do is put all of your little debts into one big one. Instead of a stack of monthly payments, you simply pay them. This makes it much easier to handle and there’s no more juggling bills. They can also get your monthly payment reduced so that it will be more manageable. Other benefits include lower interest rates, fixed interest rates, and the ability to waive fees and sometimes lower the principle by negotiating with your creditors.
The Downside Of Debt Consolidation
The only trouble is that this extends the length of the loan. You’ll be making smaller payments but you’ll have more years of paying it back. If you need short-term debt relief, this is the way to go, but make sure you have the willpower to stop charging once you get settled into the new routine.
Credit Suicide – Bankruptcy
The last resort is to declare bankruptcy. Contrary to what many people believe, it’s not a simple way to erase debt and wipe the slate clean. In most cases, you will still be paying back the debt. And rather than wiping any slate clean, it ruins your credit for years to come and makes other things difficult, like buying a house. This is to be avoided if at all possible.
Debt programs come in all different shapes and sizes for everyone. A good way is to start with credit counseling, and if that doesn’t work, look into other debt programs like debt consolidation. Whichever you choose, make it a goal to be free and stay free.