Are you someone who is weighed down by your credit card debt burden? Did you max out all your credit cards due to impulsive shopping with credit? If answered yes, you might think that the company that offers to erase your debts for pennies on the dollar is perhaps the right answer to your prayers.
But beware as this isn't true! While seeking help of the debt relief services or debt service can certainly put an end to all your financial woes, at the same time if you blindly believe them, you might even face serious long-term consequences for your credit report that might affect your future ability to get new lines of credit.
A word of caution for the hapless debtors who are looking for seeking debt relief
Before you know the various debt relief services that you can get help from, you should know the dos and don'ts that you need to follow before seeking legal help:
- Don't work with a company that promises to reduce your unsecured debt for pennies on the dollar. The truth is that there's no guarantee whether or not any creditor will accept the partial payment of a debt that is legitimate.
- Don't work with a company that asks for a substantial fee before even reducing your debt amount.
- Don't work with a company that asks you to stop making payments to your creditors as this will hurt your credit score. Ensure that the company that you work with, reports all your payments to the credit bureaus.
The debt relief options at your service: Look before you leap
Transfer your credit card balances: If you're having trouble making headway with your overwhelming credit card debt due to the hefty finance charges, you can consider transferring your balance to a new card with favorable interest rates. If you have an excellent credit, you may even get a card with a nominal rate for an year. Transfer your balance to a new card so that you can reap the benefits of lower monthly payments and convenient charges.
Combine through a consolidation loan: You may also combine your debts through a consolidation loan that carries lower rates than what you were paying on your credit cards. You can effortlessly replace multiple payments with a single monthly payment and thereby save a considerable amount of your dollars every month. By making timely payments, you can get out of debt within a specific period of time.
A debt management program: When you need the genuine help of the expert credit counselors, you can get help from them. They will teach you budgeting techniques after assessing your finances. However if you still can't get back a grip on your situation, they will enroll you in a DMP through which you can legally repay the debt in single outgoing monthly payments.
When you've tried all the debt relief options and you still don't get a satisfying result, you might file bankruptcy after speaking with your attorney. Chapter 13 Bankruptcy is a government debt relief option that helps you discharge your debts and repay an amount through an alternative repayment schedule proposed by the Bankruptcy Court. Although bankruptcy hurts your credit score, you can yet start a new life.
(This was a guest post from a writer for Debt Consolidation Care.)