Debt management plans and debt settlement programs are considered the leading alternatives to bankruptcy. They allow the borrower to gradually pay off debt on terms that are agreeable to both parties. At the same time as a debt free solution will result in a low credit score the implications aren’t nearly as serious as filing under chapter 7.
It is possible to avoid much of the stress and anxiety normally experienced when figuring how to get out of debt, provided that the right plan is chosen from the onset for proper debt consolidation. Whether a debt relief program should even be considered as a bankruptcy alternative depends heavily upon the borrower’s level of disposable income. Both a debt settlement program and a debt management plan will involve making a monthly repayment to an intermediary. If the borrower has lost their job and/or his little money available, neither debt free solution constitutes a viable alternative to bankruptcy. However, those who can afford to offer the creditor a realistic sum of money each month stand to benefit, and certainly could avoid repossession of their belongings by keeping up to date with payments.
Debt management can help you in a number of ways. It keeps the creditors off your back. They will call all of the people you owe money to on your behalf and talk to them about your particular situation. They will negotiate with each creditor to reduce the amount of the monthly payment that you owe them and they may even be able to help you get a reduced interest rate so that more of your payment actually goes towards paying off the debt, rather than paying more and more interest. Your debt management analyst can help you buy going over all your household and living expenses and helping you to come up with a realistic budget. This way you can clearly see what you are wasting money on and what you should be paying for things like groceries and eating out at restaurants. Often times we waste money on things that we don’t really need, especially when we are up to our ears in debt.
Your debt management company can help you out is by consolidating all your monthly payments into one. You send them the total amount that you are paying towards your debts and they disperse it for you and make sure that everyone gets it on time. This takes a lot of burden off you and you don’t have to worry about making sure everyone is paid the correct amount every month. If this seems like a viable plan for you then you should definitely go with a debt management program over filing for bankruptcy. A debt relief program like Freedom Debt Management is a lot less harmful to your credit rating and a bankruptcy will stay on your record for up to 10 years. Working with them can avoid you even needing to get help with repossession in case you are having trouble paying off a car loan. For this reason you should opt for the debt management program and get out of debt.
Bankruptcy services may not be the answer for everyone who is under financial stress. There are many alternatives and debt relief options to bankruptcy that may be available to you or your family members. I think that a debt management program is a good option – like Consumer Debt Solutions. In some cases they may serve as a good alternative to bankruptcy.