While many of us succeed in dealing responsibly with our debts, falling into unmanageable debt is an all too common occurrence for a lot of people. Some heavily indebted individuals have spent imprudently while others are victims of circumstances beyond their control like unemployment, medical emergencies or unforeseen changes in a family situation.

High monthly payments for credit cards, mortgages and student loans become weights around our necks. These debts force us to live paycheck to paycheck; always worrying the next phone call will be from a creditor demanding we finally pay up or watch our earnings dwindle from wage garnishments.

Luckily, several professional debt-relief options are available to help you reduce or even get rid of your debt in a consistent and logical manner.

Professional debt relief solutions include:

  • Debt Settlement
  • Debt Consolidation
  • Debt Management Plan
  • Credit Counseling
  • Bankruptcy

These services come with a price because they are complicated, and involve plenty of paperwork and terminology most of us are unfamiliar with in our daily lives. Many debtors turn to financial professionals for help with debt -- from calling lenders for lower rates, refinancing a home or simply creating a strict budget and sticking to it.

Services Often Left to a Professional

While you can handle debt-relief solutions yourself, some options are often left to a professional.

Debt Settlement


Also known as debt negotiation or debt resolution, debt settlement involves you or a debt settlement company negotiating lump-sum settlements with your creditors. The object is to decrease the principal you own while also eventually retiring the debt.

PROS

  • Expertise. Debt settlement companies often have experience negotiating with creditors.
  • No Surprises.  You won’t find a hidden surprise or something you might miss if you tried settling debts yourself.

CONS

  • Finding the Right Company. Not all debt settlement companies are the same. You will have to do your research to find a reputable, professional and successful company.
  • Costly. Hiring a debt settlement company can be expensive. They often will charge a percentage of the debt you need settled or an agreed-upon percentage of the amount saved through settlement.

 


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