Debt Relief – How to Get Out of a Hole You’ve Fallen Into

Debt relief can help people get out of a hole they’ve fallen into and start rebuilding their financial lives. Depending on your situation, debt relief can range from wiping out debt in bankruptcy to getting credit card interest rates and payment terms changed.

Some debt relief services are free, while others charge a fee to settle your credit card and other unsecured debts. Some companies are more effective than others, and it’s important to consider your individual needs before deciding which service is best for you.

Bankruptcy should be your last option when it comes to debt relief, as it can destroy your credit score and affect your financial future for 7 to 10 years. Other options include debt consolidation, which rolls multiple credit card bills into a single loan that you can pay off, and a negotiated settlement that cuts your creditor payments by as much as 50 percent.

If you’re battling high credit card debts, InCharge Debt Solutions offers a debt management plan with an average interest rate of 8.4%. Its service is highly rated by the Better Business Bureau and has helped thousands of clients repay their debts since 1997.

InCharge’s program is a good fit for many credit card holders and it’s free to sign up. In addition to debt management, the company also provides budgeting services and a free credit report.

There are several reasons you might need debt relief, including increased medical bills, loss of job or income, or a family emergency. In most cases, the first step is to look at your budget to see what you can cut.

The second step is to talk with a professional to find out what debt relief options are available to you. Often, a nonprofit credit counseling agency can offer basic budgeting help and an initial consultation for free.

A debt management program involves consolidating your unsecured debts into a single payment, with monthly payments tied to a custom-designed budget that reflects your income and spending habits. This method is one of the most effective forms of debt relief and can help you save money by lowering your interest rates and fees.

Another option is to use debt settlement to negotiate a lower amount with your creditors, though it can be more expensive than a debt consolidation loan. You can expect to pay 15 to 25 percent of the amount settled over the course of the program, but this can be offset by the money you’ll save on your overall debt.

You should know that the debt relief process may also negatively impact your credit rating during the negotiation period. However, this will be temporary and your credit score should begin to improve after the program ends.

Tax Relief

There are a few debt relief companies that offer tax debt relief. CuraDebt is one of them and has a program that deals with IRS debt, while Pacific Debt Relief also has a tax relief service that deals with state and federal taxes.