Unsecured Debt Relief

By: David Swanson

Most people have unsecured debt. It could be in the form of credit cards, student loans, medical bills, and more. The problem with this type of debt is that it can quickly get out of control. Many people find themselves at their wits end to make all of their payments and many fall hopelessly behind. Here are some unsecured debt relief options for those who want to get out from under the weight of these types of loans.

One option is to get a debt consolidation loan. This allows you to put all of your loans onto one payment so that you can manage it better. Many times these loans are at a better rate, and so you will be paying less interest over the long run. The payment on a debt consolidation loan will usually be less than the amount you were paying on all of your other payments.

If you are a homeowner, using the equity in your home to consolidate your debts is a wise move. You will get a much better rate than on an unsecured debt consolidation loan. You also have the option of stretching the loan out over more time so that your payments will be lower. The interest on a home equity loan is also usually tax deductible, so it makes your debt work for you instead of you being a slave to your debt.

For some people, these are not viable options. If you are very behind on your payments, your credit may be too damaged to allow you to qualify for a loan to better your situation. In these cases, many people seek out a debt counseling agency. These agencies will negotiate with your creditors for you. Many times they can get your interest rates lowered and fees removed. Most of the time they will offer a plan where you pay them a certain amount each month and they distribute it to your debtors. This helps to stop the collection process and allows to to begin restoring your good name.

Another option for consumers who are deeply in debt and looking for unsecured debt relief is bankruptcy. Chapter 7 bankruptcy will basically wipe the slate clean. It voids your debt so that you can start over. This is not the choice for everyone, however. You should exhaust all other options before considering bankruptcy. It is a huge blight on your credit and many companies will not extend credit to someone with bankruptcy in their history for many years. That being said, it is out there for people who feel they have no other option.

People who have secured debt or other assets may find that the court requires them to sell their assets to pay as much of their debt as possible. If you do not want to do this, filing Chapter 13 bankruptcy may be a better option. This puts you on a repayment plan. It does not forgive your debts, but allows you to have a reasonable plan to repay them, while stopping the collection calls.

There are many options for people seeking unsecured debt relief. There is not a one size fits all answer. Each situation is unique and you will need to decide for yourself which solution is the one for you.

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