In the past 3-4 years, the world is reeling under a lot of threat, there has been a lot of changes on the economic front and the slowdown has had far reaching effects on the lives of people. The situation is such that every third American is facing a tough time when it comes to the repayment of their debts. Those who are unable to repay them on time are seen taking the easiest of the routes- Bankruptcy. Many of them who are having a regular income and are looking for ways to deal with their humungous debts, take to different debt relief measures. Some of the popular methods are debt settlement, restructuring, debt consolidation and other such programs.
One of the widely accepted and used methodologies of debt reduction is the debt settlement. it is known to offer solutions to your debt issues in a timely manner. Under the process of debt settlement, both the parties i.e. debtors and the creditors are brought to the negotiating table. The debtors come up with proposals wherein they request the creditors to settle their debts for a lower value against the total amount overdue. This also indicates that you have to have sufficient money to pay to the creditors if they agree on your proposal. One of the best things about the debt settlement process is that one can completely get rid of their debt for a lesser amount than they owe and much earlier.
Another popular means of dealing with the debt is taking the help of the credit counselors. These agencies work in the favor of the creditors. They aim towards negotiating on behalf of the creditors with the debtors and in a way save them from losses due to a lower payment.
Debt consolidation yet another debt reduction strategy which is largely used by the debtors. Under the provision, once can take a single large loan referred to as the debt consolidation loan which is used to pay all the existing debts in a single shot. What is left with the debtor is a new single loan, where the EMIs are much less than that what they were paying for the multiple debts put together. In a similar way, they gain on the interest rate which works out to be a lot less in case of the debt consolidation loans. The tenure of these personal installment loans are generally kept long so as to keep the EMIs low. All this works in the favor of the debtors who are willing to keep current on their payments but generally struggle to keep the payments of multiple debts afloat.
Bankruptcy is often considered as the last resort for the debt reduction. When you have no alternatives left to deal with your debts. You are sick of the payment follow ups by the lenders and the collection agents, there is normally little left that you can do. Your income is simply insufficient to pay for the debts, taking the bankruptcy can be the most suitable option.
This step has far reaching effects on your financials and therefore should be taken after a lot of consideration and better if you consult a financial expert for the same.
With the situation getting worse, the number of people with bad credit is on the rise and so are the agencies dealing with debt reduction processes. It is best to devote a lot of time into research before you decide on the company which you think can offer your best assistance in resolving your debt situation and pulling you out of the same.