Could Debt Relief Help You Get Out of Debt Faster and Save? Find Out with Your Free Debt Analysis and Savings Estimate
Pay Off Debt Help
If your credit card debt is out of control and you are struggling to lower, reduce, or pay off debts as quickly as possible, there is some good news: You may be able to save a substantial amount of money through debt consolidation - also known as a debt management plan (DMP). Typically facilitated by credit counseling agencies, debt consolidation can provide many consumers in Pennsylvania and across the country with relief from their high-interest credit card debts, as well as ohter unsecured debts (like medical bills, unsecured payday loans, department store charges, gas cards, etc.).
When you consolidate your credit card and unsecured debts, the goal is to, ideally, direct more of your payment into paying the principal of your debts versus just the interest, and ultimately, reduce your debts at an accelerated pace. This goal is achieved by allowing you to make one, consolidated payment to a credit counseling agency which in turn, distributes those funds to your individual creditors. Consolidating debts into a single, more structured, and more manageable monthly payment can typically allow you to pay off your credit card debts faster and get your life back in order sooner.
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Why Consolidate Debts?
For many consumers, rising credit card and unsecure debts is a serious problem caused by any number of reasons, including unemployment, medical bills, or personal hardships. If you are also in financial distress, you know that debts often cause emotional and mental stress, and may even cause unwanted tension among many families and individuals. The good news is, one of the ways that you can find debt relief is through a process known as debt consolidation, or a debt management plan (DMP). The goal of a debt consolidation plan is to "consolidate," or combine, your unsecured debts into a single, more manageable and more structured monthly payment made to a credit counseling agency.
Coordinated by reputable credit counselors, the first step to debt consolidation typically begins with a review of your income, outstanding debts, and other assets. This one-on-one consultation generally means taking stock of all your debts and other expenses, as well as adding up the balances on your credit cards and the rates that you are currently paying. When credit counselors have a clear picture of your finances and how much money you can reasonably allocate to paying off debts, they typically submit proposals to creditors, on your behalf, requesting lower interest rates and the waiver of late fees and penalties. Creditors that accept the proposals are added to the debt management plan. Credit counseling agencies, in turn, distribute those funds to creditors that are in the plan.
Can Debt Consolidation Lead to Savings?
For many consumers who have the discipline to watch their budget and stop relying on their credit cards too much, a consolidation plan can likely help them get on a good path towards reducing their debts and potentially lead to savings. Keep in mind, however, that while it is the credit counselor's responsibility to request from your creditors a more lenient repayment plan, it is your responsibility to ensure that you have the funds available in the account set up by the credit counseling agency.
In addition, make sure that you understand how much savings you can potentially get, every month, with a debt consolidation program. Typically, your debt relief savings depend on several factors: the total amount of your debts, your current interest rates, and any late fees or penalties.
How Much Could Debt Settlement Save?
Another popular debt option for consumers in distress who want to payoff high credit card debt faster is debt settlement, whereby consumers may be able to "settle" credit card debt for substantially less than is actually owed. Credit card companies may be willing to settle debt with individuals who have fallen seriously behind. In many cases when this occurs, credit card companies elect to "sell off" what is known as "bad debt" to third parties for as little as ten cents on the dollar. While credit card companies typically will not settle for this amount, it does stand to reason that, faced with the prospect of selling off debt for a nominal amount -- they may be willing to consider a "reasonable settlement offer" made on behalf of consumers who are experiencing financial hardshiop and maybe even on the brink of bankruptcy.
The bottom line is, if you are ready to pay off your credit card and unsecured debts sooner, take the next step and find out what debt relief can do for you and your family. For many consumers, a debt consolidation can provide not only a more affordable and more structured payment plan, but it may also provide valuable budgeting skills. To find out more about how debt consolidation can help you, request a free debt relief analysis and savings estimate now.