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Archive for the ‘Managing Debt’ Category

There are many websites on the Internet that offer debt advices to help you steer clear of debt. Nowadays, debt is a serious problem in almost everybody’s life. Some of these websites even offer debt advice free to stay away from bankruptcy. Escalating credit card bills, divorce, or sudden unemployment can lead to bankruptcy. Many people think that bankruptcy is the exclusive technique to eliminate debts. Actually, it is not. This should be your last resort and is regarded as the worst option for debt relief.

There are basically two types of bankruptcy: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy permits you to repay your debts by selling your properties, which might or might not comprise your home. Chapter 13 bankruptcy enables you to repay your debts by a repayment plan that is sanctioned by a trustee who is nominated by the court. Bankruptcy stays on your credit report for 10 years and creates an obstacle in obtaining any form of credit in the future. It is always recommended that you stay away from bankruptcy and instead consult a debt professional who can give you free debt advices.

You can obtain debt advice free of cost from many sources and these advices principally focus on the following debt relief options:

1) Do It Yourself Repayment Plan

This is not a good plan for the disobedient people. You would not apply the tips or recommendations of a debt professional. The self repayment plan really works if you remain disciplined. All you need to do is budget properly and devise your plan to repay your debts gradually but positively.

2) Debt Consolidation Loans

You just take one new loan that substitutes all your loans (medical bills, credit cards and other unsecured debts) and you pay them off through convenient monthly payments. Subsequently, you simply have to make one single payment for the debt consolidation loan. The advantage of a debt consolidation loan is that you can devote yourself to an easy strategy to repay all your debts by only one payment.

3) Debt Management

Under a debt management plan, you can reduce your interest, eliminate particular fees and even cut down the repayment term. You can do this through the assistance of a credit counseling agency.

4) Debt Settlement

With the help of a debt settlement professional, you can lower your debts by 40%-60% of your original balance. The advantage of this program is that you can pay down your debt sooner and simultaneously save money. The credit card providers then typically mention it as “debt settled” on your credit report. This is not as harmful as having a bankruptcy recorded on your credit report.