Mounting debt creates overwhelming financial situations for millions of Americans who find themselves borrowing from Paul to pay Peter each month, getting themselves deeper into a financial crisis than the day before. If such a situation occurs, quick action may prevent future disasters. Far too many people fail to comprehend the seriousness of the debt until it’s too late, and they’re in over their heads. Do you need a debt relief lawyer? What can you do to get out of debt?
Getting out of debt isn’t easy, nor will it happen overnight. It takes diligence and effort, and maybe even a few sleepless nights. But, when you see your credit score climb and hear ‘yes’ to more loan applications, it all suddenly becomes worth it. With this in mind, many people cannot get out of debt, not for lack of desire, but instead a lack of money. We all wish there were a real money tree in the backyard that allowed us to pick off the day’s blossomed bills, but that is not reality. It’s not how things work, as we all know. You only earn money when you work hard every day. How nice it would be to pluck cash off of the tree every day, but in reality, one problem or mishap is all that it takes to create a devastating financial downward spiral that’s nearly impossible to get out of without some help. But, do not assume that you need a debt relief attorney. There are many options available that can help clear off your debts without a debt relief attorney.
Whether it’s mounting medical bills, credit cards, or other debts that stops you from sleeping at night, there is help and hope.
How does someone begin to get out of debt when they’re thousands of dollars behind? The first step in successful debt elimination is creating a debt relief plan. Consumers have several debt relief options available from which to choose from to begin the process of getting back on the right financial path. Each option includes pros and cons, which should be evaluated ahead of time. The right debt relief option for person A may be the worst for person B. That is why research is so important. You may want to talk to a debt relief attorney for more information, although that isn’t a requirement.
Since you won’t need a debt relief lawyer to use most of the debt relief options available, there is more money in your pocket to put towards the debts you so desperately want to eliminate. There may be a small fee should you choose to consult with a debt relief lawyer, which varies from one provider to the next. This is a small amount and well-worth the expense at the end of the day. The guidance and information offered by a debt relief lawyer is immeasurable and certainly provides a clear path to follow to get the results that you want.
If you prefer to keep all of your money in hand and avoid any debt relief attorney consultations, that’s perfectly fine as well. Tons of information is easily accessible online, at the public library, and via numerous other sources so hiring a debt relief attorney isn’t necessary. Use all of the information available to help you learn more about debt relief options and how they may benefit your situation without the need for a debt relief attorney on the case.
How do you know it’s time to use one of the debt relief solutions (or even call a debt relief attorney) available and when things are still under control? There isn’t a one-size-fits-all answer, although common signs often indicate that it’s time to take some of the weight off your shoulders and find a debt relief solution that works for your needs. The truth is, almost anyone can find themselves in an advantageous position when they opt to use one of the available debt relief solutions.
A debt relief lawyer often tells his clients to follow the five-year rule. If you don’t foresee yourself paying off the debts within the next five years, consider using a debt relief solution. If creditor calls and letters cause more stress than fathomable and you’re ready to pull out your hair, it’s time to find a viable debt relief solution.
When you’re overwhelmed and worried about your financial future, it is easy to agree to payment plans and fees that you cannot pay or that you may not owe. Some people also think too freely when they’re without a debt relief attorney. Rather than make rash decisions in the heat of the moment, take the time to research every option before you agree to any plan. Making even a small mistake when dealing with a creditor may cause trouble that no one wants to deal with, especially at a time when debt settlement is fresh on the mind. What are some of the most common mistakes you want to avoid during the debt relief process?
– Never pay an unsecured debt (i.e., credit card) to pay a secured debt (i.e., car payment) No matter how big the creditor’s threat, this is a mistake that can cost you personal belongings.
– Talk to a debt relief lawyer if worse comes to worst, and you’re unsure where to turn. A debt relief lawyer has advice and information that he can give without hiring him.
– Never borrow against the equity in your home. Debt consolidation (we’ll discuss this later) is one of the debt relief solutions that may offer a home equity line to repay debt.
– Do not withdraw money from a retirement fund to pay off a debt. This includes both federal and state retirement plans.
– Do not make quick decisions, especially over the phone with a creditor. This may leave you susceptible to agreements that you aren’t comfortable with and potentially other risks. Always take time to research options and evaluate the matte before making an agreement where your finances are concerned.
While this is an incomplete list of mistakes made during moments of stress, it does include some of the biggest and most common mistakes. Do not get yourself in over your head or cause more worry than you started with by participating in any of the above tasks. Debt is scary, but solutions help ease the burden -and total amount due. Accruing more debt or trading debts certainly isn’t the best idea in most situations. (There are exceptions to this, which we’ll discuss later.)
Debt management, sometimes called debt settlement plans, are tricky. Most companies offering these plans encourage clients to stop paying their debts and put the money into a protected account they manage until enough cash accumulates to offer a settlement. Not only does the debt management plan cut the interest fees and penalty off of the total amount due, but they may also lower the monthly payment for all of your payable debts.
On the downside, you lose access to all credit cards while under the debt settlement/management plan. Any cards currently used are canceled, and you can apply again only when the plan is repaid. Additionally, failure to repay the debt under the debt management plan may leave you unable to get a credit card again in the near future. Sadly, many people that use the debt management plan renege on the contract, which leaves you susceptible to future hardships.
A credit score isn’t affected by a debt management plan; however, since you’re paying an agency and not the creditor itself, you’re left open to fees, collection calls, and possible legal actions while you’re negotiating. Many people decide that it’s time to find debt relief when creditor calls and letters become overwhelming, so this is something to keep in mind. It typically takes four-six months for a settlement to begin, but many delays may require a more extended time period.
Education is power, especially for a person overwhelmed in debt. A credit counseling course provided by a licensed provider can make a major difference in your financial future and well-being, giving you the knowledge to prevent future mishaps. Costs of credit counseling vary. It’s a low-cost, extremely beneficial service that almost anyone can benefit from.
Millions of Americans struggling with debt turn to consolidation loans for help every year. It’s one of the most commonly used debt relief options around aside from debt settlement, but like other options, it’s not without its flaws. Anyone who is considering getting a debt consolidation loan should heavily weigh the pros against the cons before making such a decision. Some consolidation loans rely on home equity, which, as previously mentioned, is never ideal to use to repay a debt. Although debt consolidation loans won’t impact your credit, opening up additional lines of credit during this time could cause you to swoop back into the downward spiral of financial destruction.
You won’t need a debt relief lawyer to file debt consolidation, as many people assume. It’s undoubtedly okay to hire a debt relief attorney should you choose, but realistically possible to handle matters yourself. Many people consolidate their debts every year. If you have the time, contact numbers of your creditors, and a bit of persistence and patience, you certainly have the same skills and power potential as anyone else.
Consolidation loans work by combining all of your debts into one payment each month. The monthly payment amount is based on a predetermined amount affordable with your current financial situation. Most loans must be repaid in a 60-month timeframe, but this varies from one consolidation loan to the next.
Just about anyone can handle their own debt relief if they choose. Considering that a tax relief lawyer often charges thousands of dollars for his service and other options have their flaws, a growing number of people want to handle their own debt relief needs. It’s pretty simple to pick up the phone, call a creditor, and explain your situation. You can ask for an offer more suitable to your situation or even if they’ll reduce or eliminate interest fees and other penalties. Most debtors are willing to work with those who attempt to clear the debt. At worst, they can tell you no, but it never hurts to give it a try.
This may be another time in which consulting with a tax relief lawyer benefits your needs. If your debts are immeasurable and such options offer no help; you may consider getting a credit card or loan to repay the funds if it lowers the overall bill. Contact a debt relief lawyer if you need help determining if this option is best.
The simplest way to clear all of your debt and start a clean financial slate is by simply paying off the balance. Although, if paying off the balance was that simple, you probably wouldn’t have considered calling a tax debt lawyer or other debt relief solutions. Many people learn their situation isn’t as bad as it seems once they sit down, fix a budget, and determine their debts and what they can afford to pay. Your effort in reducing debt goes a long way.
Sit down and determine your finances and if repaying the debt within five years is possible. Perhaps you want to use a debt settlement plan to help at this time. Or, credit counseling may offer the sound tips and advice necessary to improve finances in the future. If you can eliminate the debt in the next five years, you’ll save yourself a pretty penny in penalties, interest fees, etc. And, if you do it without the aid of a debt relief attorney, you’ll save even more money.
Bankruptcy is the final debt relief option a person should use. Although it has earned a bad rep amongst consumers, bankruptcy actually helps people who otherwise would be unable to recover from their debts. It’s not as horrible as most people make it sound, although it’s true you’ll need a debt relief attorney should bankruptcy become your debt relief choice. Bankruptcy is far too complicated for the average individual, and you want things done the right way since it’s your opportunity to make a fresh start after mounting debts.
Chapter 7 and Chapter 13 bankruptcy options are most popular, one clearing all of your debts, the latter providing a payment plan that fits within your budget. Chapter 7 is used most often, although you may declare debt relief using bankruptcy only once in 7 years. It clears all debt from your slate, except child support payments, tax payments, and student loan debts.
Debt settlement, DIY options, consolidation loans, management plans, and bankruptcy are the main techniques used by people overwhelmed in debt who are looking to make a fresh start and get their debts paid and finances in order. These debt relief solutions help millions of struggling Americans find the help they need to get back on the right financial path. Perhaps one of the options can help you get back on the right road.
If you have any questions or need help getting out of debt without the extra cost of hiring a debt relief lawyer, contact us today.