Debt relief is the buzzword of the day. From Fannie Mae and Freddie Mac to banks and automakers, everyone is searching for their own personal bail-out. And, while it is now official that America is in a recession, most people have been feeling the financial pinch for quite some time.
Obtaining debt relief is no easy feat; however it can be accomplished. The problem is most people want instant financial gratification. Unless you hit the lottery jackpot, chances are this isn't going to happen. It took time to build your mountain of debt and it is going to take time to chisel it away.
Today, many people are turning to debt relief companies who offer the promise of quickly eliminating financial woes. Nothing could be further from the truth. The reality is no one can eliminate your debts overnight. Paying a company outlandish fees to negotiate outstanding balances or reduce interest rates can cost you more than it is worth.
Consider this... Professional debt settlement companies charge their clients a fee which can amount to as much as 40-percent of their total debt. If you owe $50,000, your fee could be as much as $20,000.
While debt settlement isn't quite as detrimental on your credit report as bankruptcy; each negotiated debt will remain on your report for up to 7 years.
On the flip side, not all debt settlers charge exorbitant fees. Many can negotiate deals to help you better manage your finances. Should you decide to use this debt relief option, use considerable care when selecting a debt management service provider.
Another debt relief option is credit counseling. The sad reality is most people don't know how to manage their money. They engage in frivolous spending and put everything from their morning cup of coffee to groceries and dry cleaning on their credit card. Few people pay their credit card bill in full each month and end up paying a tremendous amount in accrued interest.
There are many options for obtaining credit counseling. One trusted source is CreditInfocenter.com. This website offers a vast array of free financial tools and advice for obtaining debt relief.
The most drastic and detrimental debt relief option is filing for personal bankruptcy. Not only does bankruptcy remain on your credit history for ten long years, it can cost you money in the long run.
If you are able to obtain credit in the future, chances are you will pay a much higher interest rate. Insurance companies might raise your rates because bankruptcy places you in the "high-risk" category. There's nothing good about filing bankruptcy and all other alternatives should be considered before embarking on this debt relief path.
Our debt relief article library is packed with information to help you gain control over your debt. Topics include debt consolidation, credit counseling, budgeting, bankruptcy, personal money management and more. New article are added on a weekly basis, so please take a moment to bookmark SimonVolkov.com and visit us often!
Published on December 17, 2008 at 04:45 AM | Comments: 3
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