DEBT OPTIONS
With unsecured debt, you have 5 options.
1) Do nothing, keep paying the minimums
2) Enter a Consumer Credit Counseling or Debt Management service
3) Obtain a Consolidation Loan
4) File Bankruptcy
5) Enter the Federal Debt Resolution Program
1) Do nothing, and keep paying the minimums. If you do this, you will be in debt for 20-40 years. You can see the amount of months that it will take on the previous chart, but this does not even factor in the fact that your creditors will keep lowering your minimum payment as your balance goes down in order to keep you in debt for longer.
The major creditors have been raising people’s interest rates and lowering their balances lately. This has made it even harder for people to get by in a tough economy. If you can still afford to make your monthly minimum payments, you might not be able to for much longer.
The best-case scenario here is paying your minimum balances for 20-40 years. The more probable scenario is that something will come up that will make it impossible to keep making the minimum payments, or your creditors will abruptly raise your interest rates and payments to cause you to fall behind. You should be proactive and enter The Federal Debt Resolution program today to lock in a low payment, and to have a date set to have your debt paid off.
2) Enter a Consumer Credit Counseling or Debt Management Service. They will lower your interest rates and put you into a program to get out of debt. Sounds great, right?
- Consumer Credit Counseling programs work for the banks and not for the people. They get a large amount of money from the banks for getting you to enter their program.
- When you enter a Consumer Credit Counseling program, it will say so on your credit report, and make it very difficult to buy a home, car, or anything else with credit.
- Their payment is larger than ours, and their term is longer than ours. Who wants to pay more money than they need to?
3) Obtain a consolidation loan. This is easier said than done. In this economy, it is becoming increasingly more difficult to obtain credit. These loans just are not out there like they used to be. Also, keep in mind that:
- Many times, you are required to put up collateral, which effectively makes your unsecured debt secured. In this case, if you are having a tough time paying the debt, they can take your collateral (home, car, or other valuables)
- You are using debt to pay off debt. This is not a solution to the problem. When it is tough to make all of your payments to begin with, why trade one debt for another?
4) File Bankruptcy. No one wants to go through the humiliation of having to file for bankruptcy. There are 2 kinds of bankruptcy; chapter 7 and chapter 13. It has recently become even
harder to obtain a chapter 7 bankruptcy, which is where all of your debts are forgiven. Most people these days only qualify for a chapter 13 bankruptcy which is basically a re-payment plan. Here are some of the many reasons a person would not want to file bankruptcy:
- It is not only going to ruin your credit for 7-10 years, it is public record and can be published in newspapers, and court records can be obtained through the county court house.
- You end up paying a bankruptcy attorney outrageous fees. If you have a large amount of credit card debt, you probably don’t have thousands of extra dollars to pay a bankruptcy attorney.
- You have to forfeit your valuable assets. You have worked hard for the things you have, and I am sure you do not want to give them up.
5) Enter the Federal Debt Resolution Program. It seems like a no-brainer now, doesn’t it? Our program will negotiate your balances down to about 40% of what you owe, and we will put you in a payment plan so that the payments are manageable and not unbearable. This program is the only opportunity you have to get out of debt for a portion of what you owe, at a very quick pace. Please read about our program here and our service commitment here
When you are ready to become debt-free, please contact us, and one of our highly experienced Debt Resolution Specialist’s will guide you through the enrollment process.