Due to financial circumstances that are often beyond their control, many individuals and families in Arizona and nationwide are struggling with credit card debt and seeking much-needed options for relief. For many of these residents, using plastic to buy even the essentials is the only way that they can make it day-to-day, resulting in high balances on their cards. If you are also overwhelmed with debts from credit cards and unsecured debts (such as medical bills and utilities), you may be interested in finding out your debt relief options, including debt consolidation and debt settlement.
Debt consolidation is a process where you combine your multiple credit card and unsecured debts into a single, simpler, and more structured repayment plan made to a credit counseling agency. Another option is debt settlement, where you hope to be able to "settle" with credit card companies for substantially less than what you currently owe. Both options are popular alternatives to declaring bankruptcy, which is also a form of debt relief, but one where the impact to your credit can be very devastating and long lasting.
To compare your debt relief options and see if you qualify for savings, answer a few, simple questions and get a free debt relief estimate along with a savings quote.
How Debt Consolidation Provides Relief
Many consumers may find debt consolidation through credit counseling preferable if they like the idea of having a single, more manageable, and more affordable payment - versus having multiple, high-interest credit card debts to deal with on a monthly basis. Facilitated by credit counselors, debt consolidation or debt management typically begins with a review of your outstanding financial obligations as well as the amount of money that you can comfortably allocate to pay off your debts.
Following a review of your finances, credit counselors typically send proposals to your individual creditors requesting more affordable payment terms - such as reduced interest rates or the waiver of late fees and other penalties. Those creditors who accept the proposals are then placed into the debt management plan. The goal of credit counseling via consolidation is to provide relief with a more structured and more lenient payment plan. This then allows you to pay off your debts at an accelerated pace as well as direct more of your payment towards the principal balance of your debts rather than just the interest.
Pros and Cons of Debt Settlement
If you have the type of debt that qualifies for debt settlement, you can try to negotiate with creditors for a significantly reduced amount of what you originally owe. For many consumers, debt settlement or negotiation may offer an honest and legal way to pay back their debts without declaring bankruptcy.
Keep in mind, however, the potential risks involved: When you enroll in a debt settlement program, your credit score will typically decline because it usually involves "falling behind" on your payments in order to set aside funds that can be used to make a settlement offer (or what's also called a lump sum payment). In addition, as you fall behind in making payments, you can also face legal action for, essentially, defaulting on the terms of your credit card agreements.
But, in spite of all these risks, debt settlement has become a popular alternative for many consumers who want to avoid declaring personal bankruptcy. In addition, debt settlement can lead to a significant amount of savings for many consumers, with the amount of savings dependent on the total amount of debt, the companies involved, and their policies to extend relief.
Compare Debt Relief Options Today
As previously mentioned, you have several options when it comes to getting debt relief and ultimately, regaining financial freedom. But before enrolling in any debt relief program, make sure to do your due diligence first and be willing to spend the time in understanding how your debt relief options can affect your credit. It is also wise to know your rights as a consumer. For instance, the Federal Trade Commission prohibits for-profit agencies that promote debt relief services, over the phone, to charge a fee before they settle, or reduce, a consumer's credit card or other unsecured debt. To learn more about consumers' rights, go to the FTC's homepage
If you are also experiencing other financial difficulties due to unemployment or a personal hardship, Arizona offers a variety of state-coordinated services that can provide you with basic necessities. On its website, check out the Citizens Services page, which lists many of the services designed for people who need financial help, including assistance with food, employment, housing, or even guidance on how to prevent foreclosure.
The bottom line, if you are overburdened with credit card and unsecured debts, there is help available - whether it's in the form of a debt consolidation program or debt settlement. Finding a reputable and experienced debt relief company is a good step towards paying off your debts and getting a new lease on life. Find out how debt relief can help you by requesting a free debt relief analysis and savings estimate. Start now.