Secrets To Qualifying For Effective Debt Help
When debtors begin researching debt resolutions
, they often don't realize that they might not even be eligible for certain debt help options. Sometimes, qualifying for debt help can be almost as difficult as it was qualifying for the financing in the first place. So among the many other considerations that consumers should have when weighing solutions to debt, it is imperative that they hone in on the most feasible options.
Certain debt resolutions present more challenges than others. For instance, if you choose to declare bankruptcy or take out a debt consolidation loan, you will most likely encounter difficulty. Newer laws have made qualifying for bankruptcy even harder. Only consumers with extreme debt and financial hardship will be eligible for chapter seven, in which unsecured debts are absolved. Debtors may find it slightly easier to qualify for chapter thirteen bankruptcy, which is a five year repayment plan. Aside from the challenge of qualifying for bankruptcy, the costs of filing and obtaining legal advice often make this debt resolution not a feasible option for a large number of debtors.
Debt consolidation combines several unsecured debts into one loan, with one payment, with added benefit of a better interest rate. This makes it a debt help option that is favored by many consumers. It is important to note that debt consolidation doesn't get rid of debt, it just organizes the debt and makes it easier to pay off. Unfortunately when it comes to debt consolidation, many consumers cannot qualify because they are, in essence, applying for financing. The majority of people who need debt help and apply for debt consolidation loans, don't have the good credit score and debt to income ratio required to obtain them.
The good news is that there are debt resolutions that are easier for most debtors to obtain. Consumer credit card counseling services and debt settlement programs are more feasible options than filing for bankruptcy or debt consolidation. All consumers can participate in consumer credit counseling. However, this service doesn't really offer extensive debt relief. There is a small monthly charge, but credit counselors will work to lower your payment and interest rate, providing short term relief. Although this is an easy debt help option to qualify for, it may not be the best. The short term relief that consumer credit counseling offers, often comes at the cost of lengthening the life of the loan.
To participate in debt settlement, all that consumers need is unsecured debt that they can no longer make the payments on. Eligible candidates have five thousand dollars or more in debt. Debt settlement, which is also called debt negotiation, is one of the most feasible debt help options. Consumers can even try to settle their debts on their own. The objective of debt settlement is to eliminate debt by negotiating with creditors. Many debtors are able to become debt free by only paying 50% of the amount they owe.
The secret to avoiding difficulties and set backs when looking for debt help is to focus on the solutions to debt that you are most likely to qualify for. Among the debt help options that you are eligible for, choose the option that will help you become debt free quickly and with as little hassle as possible, so you can begin moving on with your life.
by: Landen Davidson
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