Some of the potential solutions to your debt problems are bankruptcy, debt settlement and credit counseling.
All these methods can effectively bring down your debt and can make you debt free in a limited amount of time.
However, before a debtor opts for any of these programs he should try to collect all information related to it.
Each of these methods has some advantage over the others and they also have their fall backs.
A debtor must be aware of what he hi getting in to before committing to any of these programs.
This article will give you a short overview on all these methods.
Credit counseling: This is one of the most recommended programs which educate a debtor on how he has ended up with such huge amount of debts, so that it can be avoided in future.
They also help the debtor in getting a payment plan which will help them pay off their debts.
They also get a reduced interest rate for their customers to help in repayment.
After credit counseling the monthly payment for the customers come down by as much as 20 %.
Debt settlement: This method targets the total amount of debt that has been accrued by the debtor.
Through this method debtors convince their creditors to reduce the total balance amount in exchange of certain amount of down payment.
There are various settlement companies who can assist debtors with settlement.
On an average a debtor can expect his debts to be reduced by 40% to 60% of the total amount.
Bankruptcy: This is one of the last options that a debtor should opt for debt relief.
In this method, the court orders an auction of the debtor's assets to pay off his debts.
The debts which cannot be paid off by this method are then written off.
It has severe impact on credit report.