Client Options

1. Do nothing and hope things don’t get out of hand?

With more than 1 trillion dollars in unsecured debt and the nation’s debt at an all time high, more and more Americans find it difficult to keep up with the daily necessities needed to survive. Hoping your debt situation will work it self out is “not” an option to consider and is a fool proof plan to fail. Your creditors main goal is profit, they are not in business to be sympathetic to your needs.

Doing nothing about your financial situation only prolongs the inevitable. Not only does your current situation just get worst, you have no time frame or plan on becoming debt free.

2. Debt Consolidation Loans

In the past, this has been the method most Americans considered when determining the best plan on how to solve their ever growing personal debt. Typically, the rate of interest on these loans has averaged 10% – 12%. The guidelines are strict, and qualifications to obtain a consolidation loan are becoming more and more difficult. Unfortunately in today’s economic conditions, these loans are nearly extinct.

3. Bankruptcy

When it is all said and done, you may have no other way of resolving your financial situation, and filing bankruptcy maybe your best, or only option. Once bankruptcy is filed, creditors and collections agencies will cease there collection efforts. However, many Americans today in severe financial distress may not qualify to file bankruptcy. And many who do qualify file bankruptcy with out completely understanding the programs and alternatives that are available to them.

There are two chapters of bankruptcy available to Americans today. Chapter 7 bankruptcy, which involves full and complete discharge of your debts with no repayment plan and Chapter 13 bankruptcy where you will repay a percentage of your outstanding debt over a 3 – 5 year period. Most creditors would prefer to work out a plan on behalf of a customer then to have them file for bankruptcy. The philosophy is 40% of something is better than 100% of nothing.

4. Credit Counseling or debt management programs

Credit counseling and debt management programs are similar in the way they conduct business. As a client you will make a monthly installment or payment to a company, usually a counseling agency. They will in turn disburse the funds to each of your creditors. They will negotiate on your behalf and attempt to lower your interest rates.

5. Enrolling into a debt settlement program

Debt settlement or debt negotiation is an honest and effective alternative to the above mentioned options. The process helps you manage your debt and pay it off in a shorter time period then the other options mentioned.

There are many advantages of enrolling in a debt settlement program. These are a few:

  • Honest and Reputable way to avoid bankruptcy
  • No public record of ever enrolling in a debt settlement program
  • You have the option on the length of the program that best fits your needs
  • 2-4 year program verse 5 – 8 years in a credit counseling programs.
  • Manageable monthly payment that best fits your budget

Here are some of the disadvantages of enrolling in a debt settlement program.

  • There is no guarantee that the creditors will stop calling
  • You may receive a 1099 form if you save more than $600.00 savings
  • You may be sued by your creditors
  • There is no guarantee on the amount or actual percentage amounts of settlements
  • You wages could be garnished if a judgment is obtained