Debt relief programs will help you create a structured plan that will get you out of the debt situation. The debt relief programs you can choose from include debt consolidation loans, credit counseling, debt management, debt settlement, and bankruptcy. All of these can get you out of debt. However all the debt relief programs may be effective, but you have to choose what is right for your business.
Understand the type of debts for your financial needs
How much can you afford to pay every month? Start by using a budget plan before you choose the right debt program. If you can afford to pay for the whole debt, you can opt for debt consolidation. If your income is lower than before, you need debt reduction and that involves debt settlement or bankruptcy.
Do you have a steady income coming in and can you grow it? If you can grow your money, at least until you have paid off your debts, you may not have to opt for debt settlement or bankruptcy. That way, your credit score can remain intact when you achieve debt freedom. But if you know that your financial situation will not improve soon then it may be best to consider debt reduction.
What are you willing to give up just to achieve debt freedom? It can be your credit score or your time. If you don’t mind having your score pulled down, then opt for debt settlement or bankruptcy. If you don’t mind sacrificing your time, then just work longer hours and opt for debt consolidation.
One of the benefits of debt relief programs is;
- Relief from overwhelming debts
If your business is legitimately having trouble paying back what you owe, debt settlement may help you. Once you’ve negotiated and paid your settlement, you’re essentially debt-free in less time and at a lower cost than if you tried to pay off your debts on a typical repayment schedule.
- You can actually avoid bankruptcy for your business
The biggest reason that people choose debt settlement is to avoid bankruptcy. Bankruptcy is a debt program that will follow you for the rest of your life. The bankruptcy entry remains on your credit report for 10 years, but many loans, credit card, and job applications ask if you’ve ever filed bankruptcy. If your answer is no and the bank later finds out that you actually did file bankruptcy, you could be found guilty of fraud.Settling debts with your creditors, when it’s done right, can help you avoid filing bankruptcy and dealing with the consequences of a bankruptcy.
- Repay Your Debts in Less Time
On a good debt relief program, you will repay your debts in two to four years. This is much less time than you’d spend paying back your debts normally. Even with debt consolidation, credit counseling, and Chapter 13 bankruptcy have debt repayment periods from three to five years. It might take decades to pay off debt if you stuck to the original repayment schedule.