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Debt Solution - 3 steps and 5 ways to do it

5 debt solutions

• Are you stuck up with enormous debt?
• Your total debt is gradually mounting?

There is a way out. We have listed 5 different ways of solving debt related problems:

Debt Consolidation
Debt Settlement
Bankruptcy
Self-repayment Plan
Ostrich method

Free debt counseling

Let our debt consultant help you decide the right solution.

Enjoy financial relief

Lower your monthly payments.
Reduce interest rates
Waive late fees
Stop harrassing collection calls
Have only one monthly payment
Become debt free

Debt solutions explained...

Debt Consolidation: It lowers your interest rate and waives off your late charge fees by combining your debts into a single payment. For more details, read benefits of debt consolidation
Debt settlement: In this process, only a part of total debt is paid to the creditor. A deal is settled with the creditor for a lump sum amount (which is collected under a trust account by the law firms/debt settlement companies). Learn step by step process of settling your debt.
Bankruptcy: Bankruptcy as a debt solution is considered as the last resort as its outcome is long lasting as well as far reaching. There are 2 common types of bankruptcy namely chapter 7 and chapter 13. You should avoid bankruptcy.
Self Repayment plan: You can pay off your debts on your own by developing a repayment plan on your own. A successful implementation of the plan would require:
- Self discipline and self restraint
- Knowledge of different debt reduction techniques
- A feasible budget that includes funds for emergencies and sudden expenses
Ostrich method: It says, "Ignore debt for long and it will vanish". This is not recommended and is not applicable for everyone, just a small group of people. Since this is not applicable for most of us we are not describing it here.

Pros and Cons of different solutions

	Self repayment	Bankruptcy	Debt Consolidation	Debt settlement
Creditor calls will stop?	Yes, if you are making smart payments every month.	Yes, it is illegal to call you after filing bankruptcy.	Yes, as you are represented by an attorney and all communication should happen via attorney.	Yes, as you are represented by an attorney and all communication should happen via attorney.
Interest rate will be reduced?	No	All interest will be eliminated.	Yes, will fall to 9% (approx) or lower.	Yes, will be eliminated.
Saving on principal amount?	No	All debts will be eliminated.	No	Yes, around 40% to 60% savings.
Saving on interest?	Yes, as all interest will be eliminated.	Yes, with smart payment we can save payment on interest with better handling on payments.	Yes, due to fall in interest rate there will be saving.	Yes, as all interest will be eliminated.
Easy debt planning	Yes, DebtCC system will help in managing your debts.	Its a one time filing.	Yes, as the firm will take care of your monthly payements.	Yes, as the firm will help you with your monthly payements and offers.
Third party fees	No	One time bankruptcy fees.	Yes, monthly fees and setup fees.	Yes, monthly fees and negotiation fees.
Effect on credit score	highly positive	highly negative	Positive	negative

Effects of above solutions on your credit rating

	Self repayment	Bankruptcy	Debt Consolidation	Debt settlement
Entry on credit report	No additional entry.	Yes, bankruptcy is reported.	A comment stating that you're paying an account through a credit-counseling agency appears on your credit report.	Late payments are reported. End status can be "settled", "paid" or "paid as agreed". Bargain for "paid" "paid as agreed" status.
Time till the negative entry lasts on credit report	Not applicable	It can remain for 10 years.	It remains until the account is paid in full.	Late payments can mar your credit report for up to seven years.
Effects credit score negatively	No, Regular payments will have positive effect on credit score.	Lowers it by almost 100 points.	Since 1999, Fair Isaac Corp. has ignored any credit-counseling information when calculating a consumer's credit score.	A credit report reflecting months and years of missed payments surely will drive your credit score to terribly low levels.
Other important information	Try to pay off smaller accounts faster for a better credit ratings.	It may make it difficult to qualify for new credit.	It may make it difficult to qualify for new credit.	Late payments will make it difficult to qualify for new credit.