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Are you feeling overwhelmed by debt? You're not alone. Many people find themselves struggling with high credit card bills, medical expenses, and other types of unsecured debt. But there's good news: debt resolution can offer a way out.
This process allows you to settle your debts for less than what you owe or manage them through affordable monthly payments. It's a step towards financial freedom without having to declare bankruptcy. In this article, we'll explore how debt resolution works and how it can help you regain control of your finances.
For extra help, explore the
U.S. Consumer Financial Protection Bureau (CFPB) for debt management resources. Also, the
Federal Trade Commission (FTC) provides debt and rights guidance. For approved credit counseling and relief options, visit the
U.S. Department of Justice.
If you'd rather speak to a debt specialist now, click here for a
free consultation.
What is debt resolution?
Debt resolution is a way to help someone with debt problems. It can include a number of different solutions, such as
credit counseling,
personal bankruptcy,
debt consolidation, and more.
A debt counselor's job is all about helping you save money by showing you ways to repay your debts more quickly or pay back the minimum due each month. They will work with collectors and creditors on your behalf as well as help educate you about budgeting and saving techniques.
They offer advice for those who need loans, student loans, credit card debt, mortgage assistance, and much more!
With professionals from across the United States to support your family during these tough times because we believe that everyone deserves a fresh start!
Many people believe that, in tough economic times, bankruptcy is the only way to get out of unmanageable debt and get a fresh start. However, for most people bankruptcy is not the solution, and does little more than offer a false sense of security while addressing part of your problem.
If you're ready to take control and take responsibility for your situation there are alternatives to bankruptcy that will provide relief from unmanageable credit card debt- regardless if it's from medical bills or because you weren't able to make ends meet this month.
Debt resolution is an umbrella term for several strategies to address unmanageable debt outside of bankruptcy.
The most common types of debt resolution are:
- Debt Management Plans: A debt management company negotiates with your creditors to reduce interest rates and create an affordable repayment plan. You make one monthly payment to the company, which distributes payments to your creditors.
- Debt Consolidation Loans: These loans roll multiple debts into one new loan with a lower monthly payment. This allows you to pay off debts faster by reducing interest rates.
- Debt Settlement: Professional negotiators work with your creditors to settle debts for a fraction of what you owe. This requires lump-sum settlements.
- Bankruptcy: Filing for bankruptcy liquidates your assets to pay back creditors. Bankruptcy negatively impacts your credit but wipes out eligible debt.
Debt resolution can lower monthly payments, reduce or eliminate interest, and help you become debt-free faster than making minimum payments. However, it may also damage your credit score temporarily.
Is debt resolution the same as debt settlement?
Debt resolution means coming to an agreement over how much of the debt will be paid.
Debt settlement is when you work with your creditor or other credit grantors to come up with a lump-sum payoff that would result in little-to-no disruption to other financial obligations and less stress for everyone involved.
Bankruptcy falls somewhere in between these two processes. While debt resolution may be less expensive upfront, bankruptcy can protect your assets if any future legal problems arise from missed payments on your part after negotiations have ended and all three options failed.
What this means is that debt resolution is an umbrella term for services that companies offer to help you pay off some or all of your debts by working with your creditors.
Debt settlement refers to the specific service offered by companies that negotiate a reduced amount with your creditors on behalf of consumers who have significant unsecured debt, usually in excess of $5,000.
It's also important to understand the difference between good vs bad credit when it comes to resolving large amounts of debt because people with worse credit ratings are more at risk if they choose bad actors instead of quality providers.
Learn more by reading
A Guide to Debt Settlement
How to find a reputable debt resolution company
Debt resolution companies are typically in charge of negotiating with your creditors on your behalf. They may offer advice ahead of time, or they can also do things like negotiate settlements with your credit card company for you by direct negotiation.
Many debt-resolution companies consider themselves to be more 'holistic' than the traditional bankruptcy process because they will often help people get back on their feet through budgeting and other services so that they can eventually pay down their debts without filing bankruptcy.
A trustee is not involved in this process, so no assets are lost or sold off to repay creditors during the repayment phase of the plan. Similar organizations exist for small business owners who need help repaying debts by asking for extensions and restructuring terms.
You can do a search for companies that have been identified as being the best in their field. The companies with the most positive reviews on Google are often the most reputable. You should find 10-20 references from accredited reporters if they are worthy of your trust.
The debt resolution process
The process by which debts are resolved involves negotiating with your creditors and coming up with a payment plan that suits your complication.
The Debt Resolution Process is the process through which debts are resolved. One of the most important parts of this process is negotiating with your creditors to see how you can work out a new contract that will provide you with repayment plans that benefit both parties.
Borrowers who take time and care in this part of the resolution process usually end up quickly reaching agreements and settlements for what would otherwise be unmanageable debt, and oftentimes those agreements even come as early as day one.
What other debt relief options are available?
There are a few key debt relief options for people seeking to settle their obligation. These include bankruptcy, debt settlement, using a credit counseling service, and refinancing one's mortgage loan with a monthly payment based on income.
Bankruptcy is the process of filing for personal bankruptcy which will wipe out all or some of your debts (depending on what you list as your assets) and then work out how you're going to pay those debts over several years, usually five years.
The caveat of this method is that it can't be used by everyone, most people have too many so-called "chattel" items such as a house or a car which they could lose in the event they filed for bankruptcy, so it has limited application to some.
Learn more by reading
Pacific Debt Rated One Of The Best Debt Settlement Companies Of 2020
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