Is it possible to get fast debt relief? It most certainly is. If being obligated to creditors has become a way of life, you will be happy to know it is possible to eliminate your debts very quickly. If you are asking the question of how to get out of debt consider the following:
Do not file for bankruptcy.
A lot of people mistakenly think that bankruptcy is the solution to their debt problems. In reality, this is not the answer for two reasons. For one thing, it can take away all your possessions, in the case of chapter seven. No matter which option you use, chapter seven or eleven, it will negatively impact your credit for seven years. In other words, you can say goodbye to obtaining financing during this time period.
Fortunately there are other solutions. Some of the better known ones are debt reduction, consolidation, and credit counseling.
Which is the best option? They all have their pros and cons. Here is a review of each:
#1) Settlement
This will get you the best repayment terms, and therefore is how to get fast debt relief. This is where you hire a company to negotiate with your creditors to lower your interest rates, or extend your repayment period. However, it will drastically lower your FICO score. For this reason, you should only go this route if you absolutely cannot afford your current payments.
How do you convince the creditors to give you better terms? You have to supply a letter explaining the changes in your circumstances that have caused you to need different terms.
Whether it is losing your job, having high medical bills, as long as it is a legitimate reason, most creditors will negotiate. If they do not, you are likely to file for bankruptcy. In many instances, the creditors will end up getting nothing at all. Therefore, settlement essentially limits the damages on their side.
#2) Debt consolidation loan
This is similar to credit counseling, but yet is very different. With a debt consolidation loan, you have to use your home
as collateral. The advantage is that the new payment terms will be more favorable, particularly if you have been dealing with credit card debt. The interest rates on the loan are almost certain to be lower.
The problem is that now your home is at risk. Should you run up your spending on your credit cards again, you are now in basically the same situation as before. However, now you cannot get another loan to bail you out. In this instance, there is a very high probability you will end up defaulting on both your credit card and loan payments, and your home will be foreclosed.
#3) Credit counseling
This is the best option in terms of not impacting your credit score. You should look into this before anything else. Here, you hire a company to watch over your finances for you, and ensure every payment gets to the right creditor at the right time. They are basically an overseer. In other words, it is a strategy to get yourself better organized.
Conclusion: do not file for personal bankruptcy. There are plenty of fast debt relief options out there. Hopefully these three solutions will help you figure out what to do.
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