Credit Asspciates - Debt Relief Now

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What are the Best Debt Relief Programs?   In a
society where instant gratification has become
part of our culture, its easy to develop less
than desirable spending habits. Having a good,
stable job might make you feel like you can keep
taking on big financial responsibilities, but
when something happens unexpected the next step
is to make sure your debt does not get out of
control.
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Getting laid off, falling seriously ill or
investing in ventures that dont pan out can all
send your finances into a tailspin. Before you
know it, you could have serious debt on your
hands with limited capabilities to pay it off. If
youre in this situation, filing for bankruptcy
isnt necessarily your only choice. There are
several ways to address your finances and a great
first start is with a debt relief program.
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While you can opt to battle debt on your own,
things can move along faster and easier if you
consult a professional debt relief agency. These
firms know the ins and outs of the finance sector
and theyll be able to provide you with
recommendations and advice that can lighten up
your load. They can also make sure that your
recovery from debt is done in a sequential and
sustainable way, allowing you to get back in good
financial shape and feel good about getting your
debt paid down and moving towards being debt
free. Here are some of the common debt relief
options that these agencies offer
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  1. Debt Settlement Debt settlement refers to
the negotiation by a third party with your
creditors to dramatically bring down your debt
and reduce the balance by a large percentage. The
third party negotiates with the creditor by using
a lump sum as leverage to pay off the
balance.   Heres an example Suppose a person
owes his creditor 10,000. The debt relief
company will ask the creditor to consider
forgiving 60 of what the debtor owes. If the
creditor agrees, it receives the 40 immediately
and the rest of the debt is cancelled out. The
debtor goes away with a clear record and the
third party gets paid a fee that they and the
debtor initially agreed upon.
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Many people dont know this is an option and
although it might seem too good to be true, there
are thousands of examples of this type of
success. Sometimes, creditors might doubt the
debtors ability to pay the total amount and
decide to get back as much as it can in a short
amount of time. However, there are also cases
when the creditor would much rather let the debt
remain and take its chances on having the debtor
pay for what he owes plus interest based on their
original agreement.   In order to pay this lump
sum, the debtor agrees to save up by depositing a
fixed amount into a savings account each month.
When he has saved enough in this account, the
debt settlement company contacts the lender and
negotiates on the debtors behalf. Once the
creditor agrees to the payment, the original
amount owed is reduced and the debt will be paid
off.
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2. Debt Consolidation Debt consolidation assumes
that there are several debts that need to be
paid. However, this option does not lower your
total amount owed like debt settlement options.
By offering a new loan to pay off these debts,
debt consolidation groups combine the existing
debts into one lump sum and essentially reduce
the interest people in debt would have to pay.
  Although a debtors obligations are
consolidated into one account and paid with a
single loan, the amount that is owed to the
creditors remains unchanged. Also, not everyone
is qualified for this program. If your account
has already defaulted or you do not meet a
minimum credit score, you wont be able to enroll
in this option. Other factors that could affect
debt consolidation approval are monthly income,
home ownership, and the type of loans you
initially took out. These factors further support
the best method to becoming debt free is to use a
debt settlement company.
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3. Credit Counseling Getting advice from a
credit counselor can assist you in coming up with
a plan to pay off the debt. The credit counselor
evaluates a debtors current financial status and
come up with a strategy that suits his income and
preferences.   Aside from this, the counselor
can also educate you in handling your finances
and avoiding getting into debt again. He can
offer you with a debt relief program that will
fit your needs and lifestyle.
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4. Debt Management In many ways, credit
counseling leads to enrolling in a debt
management program. A debt management adviser is
a professional who will recommend a smart and
doable strategy to repay the debt. This financial
expert will help negotiate a new payment scheme
with the creditors.   Unlike debt consolidation
where youre still required to pay the same
balances, a debt management planner can ask the
lender to reduce interest fees, or even lower the
monthly payments. With debt consolidation,
however, you will also be paying the credit
counseling agency and they will be the ones to
pay your creditors.
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5. Bankruptcy Seen as a last resort for most,
filing for bankruptcy may erase debt, but can
negatively affect your credit report for up to
ten years. It also has a social and professional
stigma attached to it. There are two types of
bankruptcies Chapter 7 and Chapter 13. Filing
for Chapter 7 is the more common of the two. Also
known as liquidation bankruptcy, this acquires
all your assets in order to pay your debts,
except those covered by the exemption law in your
state.
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Chapter 13, meanwhile, is known as
reorganization bankruptcy. This allows the
individual filing for bankruptcy to come up with
a repayment proposal that shows how the debts can
be paid in a period of 3-5 years. Similar to a
consolidation loan, Chapter 13 requires the
repayment to be made to a bankruptcy trustee, who
will then distribute the payment to the
creditors. This gives the debtor a temporary
reprieve from mounting debt, and may save his
familys home or automobile.   These debt
reduction or elimination strategies are the most
popular solutions to overwhelming debt. Although
each option is suitable depending on the
situation, it is still best to talk to a debt
relief expert to weigh your choices. By being
clear about your difficulties and capabilities,
you should find the best debt relief program for
you.   If you like this article use this search
term DebtReliefNow or click on this link to
discover other articles on this similar topic.
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Getting out of debt and gaining control of your
finances are little triumphs in life remember
to celebrate this milestone even in a simple way.
Give yourself a little reward for continued
motivation on being more financially
responsible.   If you like this article use this
search term DebtReliefNow or click on this link
to discover other articles on this similar topic.
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