Does Debt Relief Work?

Your debts keep getting bigger, even as your income stagnates. You are in a bad enough financial situation that the old adage about earning more and spending less is no longer helpful. You already spend all your free time working, and all your money goes to housing, utilities, groceries, gas, childcare, and debt payments. Your credit cards are maxed out, and you charge your last grocery haul of the month on buy now pay later (BNPL), such that you now have a few months’ worth of grocery debt following you around. If you just keep making minimum payments, you will keep falling farther down a debt spiral. The good news is that there are ways to fulfill your debt obligations without repaying every penny of the face value of the debt after a long period of time. There are several ways to do this. To find out which option works best for you, contact a Philadelphia debt relief lawyer.

The Early Bird Gets the Debt Consolidation Loan

The simplest way to make your debt go away more quickly and more cheaply is to borrow a debt consolidation loan, but if it were that easy to get a debt consolidation loan, everyone would have one. A debt consolidation loan is a personal loan with a large enough balance to pay off some of your debts and a low interest rate. By using such a loan to pay off your debts, you can save money on interest and lower your monthly payments. The bad news is that qualifying for a debt consolidation loan is not easy, since there are credit score requirements; if you are lucky enough to qualify for a loan, then the better your credit score is, the lower your interest rate will be.

Debt Settlement Is for the Fearless

If you know that you will never be able to pay the face value of the debt, now that so many late fees and so much interest have accumulated, then you can contact the creditors and offer to settle your debt for a lesser amount. Not only does this take courage and negotiation skills, but it also means that, if you succeed, your credit score will take a hit. Before you pay the settlement amount that you agreed on, be sure to get a copy of the agreement in writing, so you can hold the creditor to its promise to forgive the remaining debt.

Debt Management Is for the Bankruptcy Curious

Another option is to hire a debt management company to negotiate settlements with your creditors and then for you to pay the settlement about to the debt management company in installments. It feels a lot like chapter 13 bankruptcy, and it costs about the same, but it does not involve the court, and it does not stay on your credit report for as long.

Contact CONSUMERLAWPA.com About Getting Out of Debt

A Philadelphia consumer law attorney can help consolidate, settle, or manage your debt.  Contact CONSUMERLAWPA.com to set up a free, confidential consultation.

Source:

cbsnews.com/news/which-is-better-now-debt-relief-program-or-bankruptcy-experts-weigh-in/?intcid=CNR-01-062