Credit Card Debt
Many Americans across the nation are seeking credit card debt relief, and those who live in Tennessee are no exception. If you are also struggling with credit card debts and are falling several months behind on your payments, you may be able to find relief through one of your many debt relief options - including debt consolidation, debt settlement, or bankruptcy.
A debt consolidation agency can typically work with you to consolidate all your credit card debts, as well as unsecured debts like medical bills, utilities or department store charges, and combine them into a single, more structured, and more affordable payment plan. While debt consolidation is a smart financial move for many consumers, your other debt relief options can also include debt settlement, which, if you qualify, can significantly reduce the amount of money you owe creditors. Both debt relief options have become, for many consumers, popular alternatives to bankruptcy. While bankruptcy can also help clear credit card debts, it has a more damaging and longer lasting impact to personal credit, and should be carefully considered with the assistance of a financial advisor or attorney.
To explore your debt relief options and see how much you can save, answer a few, simple questions and get a free debt relief analysis and savings estimate. Start here.
Advantages to Consolidating Your Debts
Debt consolidation, or a debt management plan (DMP), is a debt relief option allowing individuals to combine or "consolidate" multiple credit card and unsecured debts into a single, more affordable payment each month. Facilitated by credit counselors, debt consolidation typically begins with a one-on-one consultation where they review your finances and outstanding obligations. After credit counselors determine how much money you can reasonably allocate to paying off debts, they will speak to creditors asking for more lenient payment terms - such as reduced interest rates or waiver of late fees or other penalties. Creditors that accept the proposals are then placed into the debt management plan.
The goal is, with a more lenient and simplified payment plan, you can pay off your debts sooner than if you only continued to make the minimum payments at higher interest rates. For many consumers, having a simplified and more predictable payment plan is preferable than having multiple, high-interest debts to manage every month.
Debt Settlement: Another Viable Option
As a form of debt relief, debt settlement is a fundamentally different approach than debt consolidation through credit counseling. Unlike credit counseling where you pay off the entire amount of your debt at lower interest rates, with debt settlement, you hope to negotiate with creditors for substantially less than what you owe.
Debt settlement is increasingly becoming a popular option among consumers who need relief from high-balance credit cards (typically $20,000 or more). The way it works is this: A debt relief specialist will review your debt situation and determine how much money you can reasonably afford to set aside each month and accumulate for a lump sum. Debt specialists will then negotiate with your creditors with the goal of settling debt for significantly less than what you owe.
While settlement can save you a substantial amount, it also has risks. Debt settlement requires debtors to "set aside" money for a lump sum amount, and creditors may threaten to take legal action against you to collect debt. In addition, settlement may negatively impact one's credit due to defaulting on credit agreements. However, in spite of the risks involved, debt settlement is still a popular alternative to bankruptcy, which has a more damaging and longer-lasting impact on your credit.
Get a Fresh Start With Debt Relief
If you are truly overwhelmed with credit card and unsecured debts, you can breathe a little easier because help is available. Keep in mind that because every individual's debt situation is different, it's smart to compare and contrast all your debt relief options, and do your due diligence.
If you're also struggling financially due to a loss or reduction of income, consider state-sponsored services that are designed for low-income residents. The state of Tennessee offers many programs that can assist you with job training, get access to health care services, and other basic necessities. In addition, the state's Housing and Development Agency has programs designed to help residents with their housing and mortgage concerns, including avoiding foreclosure.
The bottom line is, there is help available for you if you're struggling with credit card debts and unsecured debts. Take the next step and explore your debt relief options - it only takes minutes to request your free debt relief analysis and savings estimate. Begin.