Ways Of Dealing With Unwanted Debt

March 11, 2009 - PRLog -- Unwanted debt can leave you feeling tried and just plan washed up. The harassing phone calls day after day, the constant worry of being sued. Are you mounting even more debt by have to rob Peter to pay Paul, are you falling delinquent on bills. If so, please continue reading. We're going to dive into some options you might consider when dealing with unwanted debt.

Making the minimum monthly payments on credit cards leaves you in a vicious cycle that will probably stay with you for the next 20-30 years. To credit card companies your their favorite customer, minimum monthly payments only covers over the limit late fees, late fees. & maybe some interest. When all is said and done they will have collected double if not triple the amount you originally borrowed. Lets start off with your the first option, and that's to do nothing. This option is least recommended, because the debt isn't just going to disappear, it will always be there nagging you. Its also going to show its face when you attempt to receive credit again, such as a car loan or mortgage, and by some chance you do receive credit the interest alone makes it fearsome.

The second option you might consider is debt consolidation, which is a fairly simple concept. Debt consolidation is were you hire a company to negotiate lower interest rates with your creditors, while also negotiating a time frame that you will  payoff all your debts. Most companies set up a separate bank account that you make one monthly payment into, and the company disperse the funds to your creditors on the specific dates required. Program lengths vary due to the different amounts of debts people have, and this option might save you hundreds of dollars a month. The down side to debt consolidation is that your paying back the full amount you owe plus interest and fees charged by the company you hired to consolidate your debt. Your third option which should only be considered as last resource is bankruptcy. This option is also for people with significant amounts of debt. From what I've researched about bankruptcy, current legislation and lobbyist in Washington have made it more difficult for someone to declare chapter 7 bankruptcy. In most instances people attempt to file chapter 13 bankruptcy in which you are still responsible for a large portion of your debt, meaning you will have to pay it back. My opinion on the matter is that your still required pay a portion of your debt which really hasn't helped and your stuck with a stamp of bankruptcy on your credit report for 10 years. Bankruptcy doesn't look favorable to creditors when researching your credit history, this should be your last option!

The fourth and final option we will be talking about covers debt negotiation, also know as debt settlement. Debt negotiation is also a fairly simple concept with obvious benefits, its the ability to reduce your over all amount of unsecured debt. Unsecured debt consist of such things as credit cards, medical bills, personal loans etc. Examples of secured debts are mortgages or car loans, if you don't pay your mortgage its secured by your house, which they will take away (foreclosure). Their are two options you have with regards to debt negotiation both consist of lump sum payoffs of reduced amounts of principal. A debt negotiation company could probably confidently say that they could settle all your unsecured debt(s) in a week, the only problem would be that once settlement is agree upon by your creditors they are going to want payment in a very short time. If your like most Americans your not going to have that kind of liquid cash just laying around, right? This leaves us with the second option you have with debt negotiation.  Just like in debt consolidation were a saving account is set up, in which you would make monthly payments into. As the funds in this saving account accumulate, the company settles one account at a time, starting usually with the smallest debt until they are all gone. Debt Negotiation is not for everyone, it is considered an alternative to bankruptcy which is for people facing a legitimate hardship and have fallen behind on their bills. Debt negotiation also has an adverse effect on your credit, once a debt has been settled it will show up on your credit report as settled for less than the original amount, its commonly know that someone signing up for debt settlement already has bad credit. Its also known to help with your debt to credit ratio, which is a factor of your credit score.

In your bottom line, debt negotiation has the ability to reduce your overall unsecured debts by possibly thousands and leaving you debt free in the end. Most debt settlement programs run anywhere from 12-36 months depending on the amount of debt a person has. Now that you know your options we hope you can breath a little more easy. Consider your options carefully to determine which is best for your particular situation. At anytime you have questions with regards to anything in this article, or things that weren't mentioned and you just have a question on, please call 888-40-SETTLE, and we will be happy to answer any questions free of charge.

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At http://www.settlingtime.com we help people that are in financial trouble, get out of debt, at a major discount, and normally less than half the balance. We offer free no obligation consultations on how our program works and how to become debt free!