Many residents of Tennessee, like many Americans across the country, are struggling to pay off and manage their credit card debts. If you are also overwhelmed with skyrocketing credit card debts, as well as unsecured debts (like medical bills, gas bills, or department store charges), you might be interested in finding out how debt management, or debt consolidation through credit counseling, can help. In addition, there are other debt relief options that can help you resolve your debts, including debt settlement and bankruptcy.
Debt management or debt consolidation typically provides consumers with multiple debts with a single, easier-to-manage payment plan to a credit counseling agency. The goal of debt management is, with a more structured and more affordable repayment plan, you can ideally reduce your debts sooner than if you only continued to make the minimum payments at higher interest rates.
In contrast, debt settlement is increasingly becoming a viable debt relief option for many consumers, typically those with high balances on their cards. It provides relief by allowing consumers to settle, or negotiate, with creditors for a substantially reduced amount of their original debts. These days, many consumers have made debt consolidation and debt settlement popular alternatives to bankruptcy, which is also a form of debt relief, but one that has a more damaging and longer lasting consequence on personal credit.
With a free debt relief analysis and savings estimate, you can find out how debt relief can help take the pressure off your debt crisis and get you on a path to becoming debt-free. Answer a few, simple questions now to begin.
What to Expect with Debt Management
Debt consolidation through credit counseling, or a debt management plan (DMP), is a proven and legal way for many consumers to get relief from credit card debts and other types of unsecured debts - such as medical bills, department store charges, or utilities. An overview of how it works:
Facilitated by credit counselors, debt management generally begins with a review of your financial situation - taking into account your income, outstanding financial obligations, and other assets. Once credit counselors have a clear picture of your finances, they will typically develop a strategy to help you pay off your debts sooner than if you only continued to make the minimum payments at higher interest rates.
With a strategy in mind, they will generally submit proposals to credit card companies, on your behalf, requesting lower interest rates, and a waiver of late fees and other penalties. Creditors that accept the proposals are added to the debt management plan. Credit counseling agencies, in turn, will distribute those funds to creditors that are in the plan.
How Does Settlement Provide Relief?
For many consumers who are struggling with high balances on multiple credit cards, debt settlement is becoming a popular debt relief option. By settling debts, you can save a substantial amount of money and allow yourself to potentially settle credit cards in as little as 12 to 36 months.
When you enter a debt settlement program, the goal is to negotiate, or "settle," with creditors for significantly less than what's owed. However, like other debt relief options, debt settlement has potential risks:
With debt settlement, your credit score will typically decline because the process involves "falling behind" with your payments in order to save up funds, over an extended period of time, that you can use to make a settlement offer (or a lump-sum amount). As you fall behind in making your payments, you will likely see your credit score go down, particularly if you had good or excellent credit prior to starting the debt settlement process. In addition, many consumers entering a debt settlement program can face legal action from creditors for, essentially, defaulting on the terms of their credit card agreements.
But in spite of the risks, debt settlement has become a popular relief alternative for consumers who want to avoid bankruptcy, which has a more damaging and longer lasting impact on one's credit.
Get Help from the State
If you are struggling financially, there are many state-sponsored services or programs that are designed for low-income residents and families. The state of Tennessee has programs for its residents who require job training assistance or in getting access to health care services and other basic necessities like food, child care, and other benefits. In addition, the state's Housing and Development Agency has programs designed to help residents with their housing and mortgage concerns, including avoiding foreclosure.
Your Savings with Debt Management
For many budget-conscious consumers, debt management or consolidation, if followed faithfully, can offer a more accelerated and more predictable way to pay off credit card and unsecured debts. In addition, it can allow many consumers to save money, reduce interest rates, and have late fees or penalties waived. With debt consolidation, the amount of money that you can save every month generally depends on several factors: the total amount of your debts, the current interest rates, and any late fees or penalties.
The bottom line is, if you need relief from credit card and unsecured debts, there is help available. Take the first step, explore your options, and determine which program can help you manage or reduce debts, and give you back your financial freedom. Answer a few, simple questions now to get your free debt relief analysis and savings estimate. It only takes minutes to complete the form.