How To Take Advantage Of This Recession To Eliminate Your Unsecured Debt
The current recession has damaged almost every industry and most of all the finance industry
. But the stimulus money provided by the federal government as a help to money lending institutions has helped debtors indirectly. Nowadays many debtors faced with huge debts - especially unsecured debts - are opting for debt settlement programs. These debt settlement programs are offered by money lending institutions in order to save the debtors from bankruptcy and to recover some of their money.
In case the debtor files for bankruptcy, his or her assets are liquidated and used to pay of loans. But preference is given to secured loans and unsecured loans usually never get paid. Hence unsecured loan providing institutions like credit card companies consider debt settlement as a method to get some of their money back. They assess the debtor's actual paying capacity and reduce the loan to an amount much lower than the original amount payable. The debtor can choose to pay this amount as a lump sum or in easy monthly installments.
Not only those debtors who are faced with bankruptcy but also others who are in huge debts and nervous due to the current financial situation are opting for debt settlements. Other than debt settlement, there are many other ways to reduce and eventually eliminate unsecured loans. Debtors have the option to consolidate various high interest unsecured loans like credit card loans. This can be done by taking a single large low interest loan and paying off the small high interest ones. A debtor can convert the unsecured loans into secured ones. Secured loans have a much lower rate of interest than unsecured loans. By using these methods, a debtor can eventually eliminate unsecured loans. Due to lower amount payable and lower rates of interest it is easier to repay the remnant secured loan.
It would be wise to not go directly to a debt settlement company but rather first visit a debt relief network. The top debt relief networks only allow debt settlement companies into their accredited organizations that prove a track record of successfully negotiating debts and have also been certified. They are free to use and offer helpful debt relief advice.