Mind gets blocked when debt is on head and there is hardly any hope from the economy to help. Wrong is the information that the federal government grant can reduce personal debt problems. Well, frankly speaking, those grants are restricted to researchers and how many of debtors are researchers in reality? Very few!
Personal debt problems have to be solved at a personal point. We have written this article to inform debtors the best ways to get rid of debt be it student loan, credit card, mortgage, auto loan or any other type of.
The oldest way of reducing debt is to apply for bankruptcy. There are two types of bankruptcy in US: Chapter 7 and Chapter 13. The information can be available online how to file the application. This can reduce the unsecured debts even more than $10,000 and at times court announce a fixed repayment plan over a period of 5 years to broaden the repayment period. This can however cost one social status. The attorneys are awarded by the court judge and they need to pay their legal fees as well.
The other way of doing the debt reduction is to apply for debt management plan. Under this plan, the debtor manages the debt reduction month by month by segregating a small portion of debt towards the debt and keeping a minimum amount towards his personal life consumption. This structure does not reduce the debt but surely gives enough time and breathing space to debtors. Private lawyers or financial experts can also be hired to decide a more professional repayment schedule.
Debt consolidation is another trick to wipe off the group of debts. If debtors are lucky they may receive a plan wherein a single repayment loan can be borrowed to pay off all the outstanding loans or cards. The interest rate may or may not be low. The debt is spread over a longer period of time and total debt could be higher than the original debt. Consolidation is possible for any type of loans, bills or cards and in any permutation combination.
Settling the debt is more vital for those who don’t have equal money of debts. They can settle the debts under debt settlement plans by hiring an expert who becomes the mediator between creditors/lenders and debtors. Negotiating is their skills and amount of debt can be reduced in total.
Refinancing is more popular in certain loan products e.g. home loans or auto loans. The idea is to switch to a better bad creditloan products with some of the existing benefits may be remaining intact. Refinancing is though at the call of the lenders and can be denied. Again debt reduction is guaranteed but a delay is possible!
Credit counseling is more theory based approach where coaching and mentoring is provided to debtors. All practical aspects are discussed and viable options are catered to choose one out of existing possibilities. This can be free or at a very low fee.