Debt relief is the process of reducing or eliminating debts that are too large for a person to pay. It can include a variety of methods, such as debt consolidation, credit counseling, debt settlement and bankruptcy.
Many people find themselves in the midst of debt because they’ve stacked credit-card balances, loans, and other types of unsecured debt on top of their regular expenses like rent, utilities, and food. The burden can be daunting and it can seem impossible to stay afloat financially.
The good news is that there are several options for debt relief to help you get out from under a mountain of debt. Choosing the right solution for you depends on your financial situation and your specific goals.
1. Consolidate your debt
One way to eliminate a huge amount of debt is by consolidating your debt into one, lower interest rate loan with an affordable monthly payment. You can do this by signing up for a debt management program with a debt relief company, which will give you a plan that fits your budget.
2. Reduce your debts
Another option for debt relief is to reduce the number of your unsecured creditors. This can be done by negotiating with your creditors and getting them to agree to settle your debt for less than what you owe. This will result in a reduced monthly payment and may save you a lot of money in the long run.
3. Forgive your debts
If you have a large amount of unsecured credit card debt, you might be able to get it forgiven. This can be done through a debt settlement company, which negotiates with your creditors on your behalf and can reach an agreement that will reduce the amount of interest you owe.
4. Reduce your debts faster
If your unsecured debt has grown so fast that it has become overwhelming, you can get out of debt by applying for a debt consolidation loan with a debt relief company. This can be a great option for lowering your monthly payments, but it is not always the best choice.
5. Restructure your debts
If you owe more than the value of your home, you might be able to restructure your debt. This can help you reduce the interest rate on your debts, lower your monthly payment and avoid a foreclosure or other financial disaster.
6. Reduce your debts for a better credit rating
If you’re struggling to get your credit score back up after a period of bad spending, you may be able to apply for a debt reduction program with your credit card companies. This will reduce your debt, which could increase your credit score and make it easier to secure new lines of credit.
7. Restructure your debts for a better income stream
If your debt has increased because of a change in your income, you might be able to get debt reduction or debt forgiveness through a government-sponsored program. This can be a great option for someone who is in debt because of a temporary job loss or health problem.