You don’t have to go down without a fight when it comes to debt. In fact, there are several ways for you to overcome it. We here at Financial Rescue LLC believe that enrolling in our debt settlement programs is the best path for you, but for fairness, we have curated the usual trends that people turn to when they need debt relief. What’s the right one for you?
5 Top Debt Settlement Alternatives
1. Debt Consolidation
Although this will NOT lessen the amount of your debt, this option is most popular to the masses because it does make tracking multiple payments easier. However, of course, consolidating your payments into one payment means you would have to apply for a bigger loan in order to pay off everything and focus on the total of those every month. And of course, a bigger loan means a bigger debt to pay. A downside of this that it transforms your low-risk, unsecured debt into a high-risk, collateral-based debt. Once classified as high-risk, your estate—and basically all property to your name is in jeopardy. Should you reach the breaking point and default on repayments, you can definitely lose all things you hold dear.
2. Credit Counseling
Getting a second opinion is always a must, that’s why credit counseling also holds some sort of appeal to people who want to entrust all their worries to these third party professionals. If you don’t know exactly what they do – and no, it’s not just to give you sound financial advice, they’re actually the ones who negotiate with banks or financial institutions on your behalf.
However, it’s important to note that even if the counselors manage to negotiate for a lower interest rate, you will still involve the same monthly payments to your creditor. It’s true that a lower interest is a great catch, but with regards to dealing about your debt situation? Not so much. Instead of lowering your principal debt, you might accumulate more considering you’re now tasked to pay monthly fees to your credit counselor. In fact, statistics show that there are 75% of people who enroll but fail to complete credit counseling programs.
Usually considered the last resort for most, filing for bankruptcy wipes out unsecured debt usually over or within four months. The upfront cost for filing this ranges at a cheap price of $1,200-$1,500, giving you the opportunity for a total and one-time debt relief.
As appealing as that sounds, there is, of course, a downside to this particular course. You will have to file this in court which means that your bankruptcy will be on your name, on public record—for the rest of your life. You might think of the instant relief it offers once your debt is cleared, but the consequences are grave. For instance, you will find it near impossible to secure future credit or apply for secured loans. This will reflect on your record for at least a decade.
Still, if this remains a solid option for you, why say no to a fresh new start? Just be sure to commit to rebuilding your credit immediately.
4. Borrow from family and friends
A popular yet secret (or shameful) avenue for some, borrowing from friends and family can actually be a good thing for you, especially if it’s with someone you trust. Most people will advise you against it, but if you are confident of being able to pay off what you owe—you know that this can be the safest and least stressful option for you.
Still, other than the threat of broken relationships due to slow or “forgotten” repayment dates and postponed deadlines, the fact remains that borrowing money should be handled in a professional manner to make sure both parties practice fairness. If you don’t think you really mean it when you say you’ll repay what you owe your relative, it’s best to avoid doing it altogether. Severed family ties, bad blood, and lawsuits among friends and family is definitely not worth the risk.
Call it giving up, but obviously this option will only make your situation worse. For instance, delaying payments in your account will only lead to late fees and worse, a bad dent on your credit score. And do you know it takes a significant amount of time to make your record spotless again.
Doing nothing also includes only paying minimum payments every month, because you’re only falling into the horrid “credit treadmill” where you keep on working and working to pay off your debt but you’re literally going nowhere. Just reaching the minimum payment every month is only paying for the interest!
So why debt settlement programs?
It’s no doubt that debt settlement is becoming the most acceptable and no doubt the best debt relief option to avoid bankruptcy. Taking only 2-3 years to complete, settling your debt can take a short of time and money until the debt owed is settled—guaranteed! Although limited to unsecured loans, there is no need to stake your valuable assets as collateral. It’s worth the risk, considering your debt can be watered down to at least 50% via one-time payment or monthly installments.
Partnering with a reputable debt relief company such as Financial Rescue LLC will give you the peace of mind you’ve been dreaming of. In order to set things in motion, you would simply have to give 3 monthly installments in a secure account for your easy access. If you’re interested in the prospect of being debt and hassle-free, debt settlement relief is the best option for you. Financial freedom is yours for the taking!