Debt Relief Options
Getting out of debt may seem impossible, but there are actually some simple ways to deal with your debt. In 2022, you have several options to minimize or completely eliminate your debt. Here are just a few of today’s most popular and effective types of debt relief:
Debt settlement: With debt settlement, you will work with a company that will manage your debts. Representatives from a debt settlement company will contact your creditors to negotiate a lower debt on your behalf. You can use this option if you have multiple types of debt, such as credit card debt, medical debt, loans and more.
Keep in mind that debt settlement will impact your credit score. However, you’ll end up paying less than you owe, and you will be able to avoid bankruptcy proceedings.
Debt management: If you choose debt management as a form of debt relief, you will work with a debt management company or credit counseling agency. Because these companies work with credit card companies, they can help you avoid fees and negotiate for lower interest rates.
You will have to close your credit cards while you work with a debt management company. However, you’ll be able to apply for new credit cards after you complete your debt management plan.
Debt consolidation: A debt consolidation program lets you combine all of your debts. This process lets you make one simple payment with a lower interest rate. It’s easier and more affordable than paying multiple debts.
Before you choose a debt consolidation plan, consider your options. One option is to combine your debt into one debt consolidation loan. Another option is to use a balance transfer card, which lets you put all your debt on one credit card.
You can find out if you qualify by applying to different lenders online. You may qualify for a debt consolidation loan even if you have a low credit score.
Tax debt relief: If you’re one of the millions of Americans who owes money to the IRS, you have a few debt solutions to choose from. One option is to consult a tax relief company. Tax relief companies work with you and the IRS to come up with a convenient repayment plan.
A second option is an “offer in compromise.” This lets you settle your tax debt for less than what you owe. You will have to contact a representative from the IRS to find out if you qualify for this option.
Bankruptcy: Declaring bankruptcy may seem intimidating, but it can be an effective debt relief option. Chapter 7 bankruptcy is an immediate solution to your debt. This type of bankruptcy lets you pay lenders with some of your assets. You can use Chapter 7 to relieve medical debt, credit card debt and more.
Another type of bankruptcy, Chapter 13, lets you pay back your lenders through a 3-5 year repayment plan. As long as you make payments, you can eventually eliminate your debt.
If you are considering bankruptcy, set up a free consultation with a bankruptcy lawyer.