Credit Card Debt
If you are overwhelmed with credit card debts due to any number of reasons (like unemployment, medical bills, or personal hardships), you're certainly not alone. Many consumers in states like Michigan and across America are in similar situations and looking for ways to get relief. Fortunately, there is a variety of debt relief options that could lower your payments, reduce interest rates, or even settle your credit card debts for much less than what you currently owe.
One of those options is debt consolidation through credit counseling -- which typically involves combining, or consolidating, multiple, high-interest credit card debts and unsecured debts into a single, more structured, and more manageable monthly payment. Another viable option is debt settlement or debt negotiation -- which involves settling or negotiating with credit card companies for substantially less than the original amount of your credit card debts.
Today, both debt relief options have become popular alternatives to bankruptcy -- which has a more damaging and longer lasting impact to one's personal credit. To find out how much debt relief could save you, request a free debt relief analysis and savings estimate.
Benefits of Credit Counseling
If you are overburdened with credit card debts and other types of unsecured debts, you're not alone. Perhaps you have experienced a job loss, a medical emergency, or dealt with a personal crisis. But regardless of how you found yourself in debt, you may have several options available to find relief.
One popular and proven method is debt consolidation, or what some people refer to as a debt management plan (DMP). As mentioned earlier, debt consolidation typically involves consolidating your high-interest credit card and unsecured debts into a single, easier-to-manage, and more structured monthly payment made to a credit counseling agency.
When you enroll in a debt consolidation program, credit counselors review your debts and try to determine how much money you can reasonably allocate to paying off your debts. Then, they typically develop a relief strategy, which includes submitting proposals to your creditors, on your behalf, requesting reduced interest rates and the waiving of late fees and other penalties. Creditors that agree to extend more favorable and lenient payment terms are placed into a debt management plan.
The goal with debt consolidation is: With a more structured and manageable payment plan, you can, ideally, direct more of your payment towards paying the principal balance of your debts versus just the interest. This type of approach, when followed faithfully, can help you pay off your debts at more quickly.
Credit Card Debt Settlement
Depending on the type of debt that you have, you may be able to find relief through debt settlement -- where you hope creditors will settle, or forgive, your debts for significantly less than what you owe. While this approach has helped many consumers manage their debts better, keep in mind the potential risks:
As the term "debt settlement" suggests, credit card companies are certainly not legally required to "settle" or accept your settlement proposal. In many cases, you will be advised to stop making payments on your credit cards to save up funds, over a period of time that you can later use to make a reasonable settlement offer. As a result of "non-payment," creditors may threaten to sue if you default on the terms of your credit card agreements. In addition, many consumers who default on the terms of their credit card agreements typically experience a decline in their credit scores.
But in spite of the risk involving one's credit, debt settlement remains a popular debt relief alternative to bankruptcy -- which has a more serious and longer-lasting effect on your personal credit.
Reach Your Debt Goals
Imagine the day when you are finally able to say that you are debt-free. For many consumers struggling with credit card and unsecured debts, the goal is to pay off their debts and get a fresh start. For some, consolidating their debts may be the way out of debt, while for others debt settlement may be the right approach. But regardless of which option you choose, make sure to do your due diligence to ensure that you find a company that will have your best interests at heart.
If are ready to take the next step in finding debt relief, begin by answering a few, basic questions here at MichiganDebtRelief.org and receive a a free debt relief estimate and savings analysis.