If you are in profound debt and struggling to find a way out, opt for debt solution. None of the debt solution measures can eliminate all your debts. But it can certainly reduce your debt burden. Debt consolidations, debt settlement, bankruptcy, are some of the effectual debt solution measures. Not all the procedures will suit you. To choose the most relevant debt solution you should understand the different means of debt solution.
1. Debt consolidation:
Debt consolidation is the most accepted debt solution method. This process helps you to lower your interest rate and waive off the late fees. If you opt for debt consolidation, the debt consolidation company merges your multiple debt payments like the medical bills, credit card bills, unsecured debts and all other payments into one. You would have to make a single monthly payment to the debt consolidation iva company and the company shall pay your debts.
2. Debt Settlement:
This is the most effective means of debt solution. In fact it is an alternative solution to bankruptcy. The debt settlement company negotiates with all your creditors to reduce your payable amount to nearly 40% to 60%. This is the process by which you stop paying to the creditors but keep saving the money instead. After your have accumulated at least 50 % of the loan amount, your debt settlement company shall negotiate with your creditors. Even you can negotiate with your creditors while settling your debts. But if you are unable to do so certainly contact a debt settlement company. However it is very important to take the correct decision at the exact time, while opting for debt settlement. Be careful while selecting the correct debt settlement firm.
While opting for debt solution, if all other options fail, you can file a bankruptcy. It is the easiest way to reduce or eliminate debts. When all other options, to come out of the debt phase are closed, you can declare yourself as a bankrupt. Basically, it is a legal process in which the person or the company declares that he is unable to pay his debts. The process of bankruptcy helps them to eliminate their debts or repay them under the protection of the bankruptcy court. The total number of bankruptcies in US is at a rise. Recently 1,794,795 number of people have been discovered to be bankrupt.
Despite having several advantages, bankruptcy should be avoided. If you are declared a bankrupt, then it will be reflected on your credit report for at least 10 years, from the day when you have been declared a bankrupt. Bankrupt people cannot easily purchase or rent a home or purchase insurance. Personal Bankruptcy can spoil your social status to a great extent.