Let’s face it… we all owe money to someone.
Sometimes this debt becomes unmanageable for whatever reason. There are
options out there to help you with debt relief, and A Better Way
can help you with all of them.
One common form of debt relief comes in the form of
debt consolidation. This is where all your debt gets pooled together
and you make one payment a month to whoever is managing the
consolidation. Once the consolidator takes their fee, they disburse the
rest of the monies to your creditors. This type of debt relief is very similar to the
Chapter 13 bankruptcy process, but it lacks some of the benefits and protections of
the bankruptcy court. With a debt consolidation, the creditors may
continue to add interest, late fees, and finance charges to the
accounts. Also, consolidators may only work with certain types of
creditors. For example, you may owe credit cards and medical bills, but
the consolidator will only manage debt relief for the credit cards. Lastly, because the
automatic stay only applies to bankruptcy, there is no guarantee that a
creditor will not get frustrated with the debt relief consolidation arrangement and
file a lawsuit against you for the balance that you owe.
Debt negotiation can be an affective way of
managing your debt. This form of debt relief is where you attempt to settle a debt with a
creditor or their representative, usually for less than the total
balance owed. In order to make these debt relief negotiations work, the amount you
settle upon must usually be paid in one lump sum within a couple of
weeks from the agreement. If one of the negotiated terms is not met,
the agreement will be voided. Again, there is no federal protection
from the bankruptcy court here to require the creditor to accept your
terms.
It is not uncommon for debtors to be in a debt
negotiation or have their accounts managed with a debt consolidator for
a few years and then decide to file a bankruptcy. There are federal
protections involved with a bankruptcy which will help give that fresh
start.
If your debts have become troublesome, or you spend
your nights tossing and turning trying to figure out how to manage your
money, it is time to give a professional a call. We here at A Better
Way can assist you with your debt, no matter which road you choose. Let
us show you the better way.
