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Debt Relief Options
Everyone’s Debt is Different
Overview of Debt Relief Options
Many people find themselves struggling with huge debt and no way to manage it. A sudden change in income, emergency, or other unforeseen event can knock anyone off their financial feet. Here, we compare 2 strategies for managing debt. For more in-depth information on these strategies see the information below.
What is it?
Working with a company, you make monthly deposits into an account. The company negotiates with your creditors to accept less than the debt owed. That amount is then paid to creditors, from the account you deposited into, until the debt is resolved.
Pros
- Significant savings over making minimum payments
- One low monthly program deposit
- Faster than making minimum payments
Cons
- Debt collection calls
- Legal risk, impact to credit
- Results vary
What is it?
You take out one loan to pay off all your debt. This loan may carry a lower interest rate than your debts. You make fixed monthly payments on the loan until it is paid off.
Pros
- One predictable monthly payment
- Flexible terms
- No credit impact
Cons
- Need good credit
- No reduction on principal
- Results vary
Which is Right For You?
Whichever strategy you choose, know that you are not alone. Millions of Americans are struggling with high interest rates, stagnant wages, and unstable employment, but not all of them are actively looking for a solution like you are right now. So keep going!
If you need help understanding the differences between these options, give us a call. One of our Certified Debt Consultants would be happy to answer any questions you have.
