How much debt do you have? Has it become unmanageable? Well, you are not alone. Studies show that the average American has a personal loan of around $38,000. The situation is so bad that 4 million Americans use most of their wages to pay delinquent consumer debts.
If you are interested in paying off your debts, then you are already one step ahead. Now you need to think about all the options that will enable you to manage your debts. Here are some of the debt solutions in North Bay:
1. Debt settlement
If you feel that you are not in a position to pay your debt entirely, then you need to consider debt settlement. This is a process wherein you will negotiate with the creditor to pay off a reduced sum payment instead of the full amount that you owe. This is usually done with a debt settlement company as the intermediary. It will cause you to have a lower credit score but can be the best way to reduce and manage your debts if you were already getting behind on your payments.
2. Debt consolidation
Debt consolidation refers to the process of refinancing your debt. It involves taking a larger loan and using it to pay other smaller debts that you might have. You should consider this option if you have many obligations that are difficult to keep track of and if they have high-interest rates. It makes financial sense to consolidate debt if the new loan has a lower interest rate.
3. Debt relief
Debt relief is the process through which part or all of your debt is forgiven. You can be eligible for debt forgiveness under certain circumstances. For example, if you work for a non-profit or government, you might be able to have your debts forgiven after you have paid off some of what you owe for about 120 months.
You can also qualify for debt forgiveness if you work as a teacher for five years. This can make you eligible to have about $17,500 written off.
You can be qualified for many other types of debt forgiveness programs. A good debt counselor will ensure that you learn about all of them and use those available to your advantage.
4. Declaration of bankruptcy
Bankruptcy is a legal process in which you declare you are not in a position to pay off your debts, and you are seeking relief from those debts. It is a long process that has repercussions for the debtor and will be reflected in your credit history. The court must be involved. Many creditors would rather opt for debt settlement than having their debtors declare bankruptcy. So you should consider this as a last resort.
While debt can be overwhelming, you should remember that it doesn’t mean that you should give up. With the right advice, you will be in a better position to deal with it. Thus, you should find debt solutions that can help you pay what you owe efficiently.