These are extraordinary times. Due to the COVID-19 pandemic, millions of Americans no longer have jobs, but the bills keep coming. Government stimulus checks and unemployment checks can only go so far. For families across the country financial disaster is looming.
In reality, however, financial hardship can happen at any time. If you are feeling overwhelmed by debt, struggling to make minimum payments, or dodging calls from creditors, do not panic. Debt Rescue Law is here to help. Specifically, we can help you find the relief you need.
Debt relief options
Debt relief options include:
- Debt settlement – is a process in which you “save” a certain amount toward the payment of your debts. A third party, usually a debt settlement company or lawyer then negotiates with creditors to reduce the amount owed, primarily on unsecured debt such as credit cards. This is an option when you have fallen behind on or skipped payments.
- Consolidation – is a method that allows qualified individuals with high-interest debt on multiple accounts to combine them and make one payment with lower interest.
- Bankruptcy – is a legal process conducted in court that facilitates complete or partial elimination of debt, or partial repayment. There are several different types or classifications of bankruptcy for businesses and individuals.
Each has its pros and cons, which or experienced debt relief attorneys will review with you during your consultation. Ultimately the one that is best for you depends on your specific situation.
This is why it is so hard to get out of debt on your own
At Debt Rescue Law, we understand that having debt does not mean you are a bad person. Nor does it necessarily mean that you are lazy or fiscally irresponsible.
While it is true that unchecked spending can result in burdensome credit card debt, other factors may also be at play. Sometimes, people simply fall behind on their mortgage, car, or credit card payments because of illness, injury, or other unexpected events.
In many cases, people struggle with debt for years – even if they make monthly payments on time. This is most common when people with credit card debt only make the monthly minimum payment. This payment is calculated based on specific criteria including but not limited to your total balance and interest rate.
The trouble with making minimum payments is that interest on the outstanding balance and new purchases add up quickly. A small balance quickly becomes a big balance and before you know it, you are in over your head. In some cases, it can take decades to pay off your entire balance on your own.
How debt relief methods affect your credit
Consumers with significant debt often wonder how different debt relief methods could affect their credit. This depends on the type of relief. In general:
- Debt settlement – may initially hurt your credit because you opt not to make payments while negotiations are ongoing. This tends to be temporary and credit improves as remaining debt is paid off.
- Debt consolidation – may also harm your credit at first. However, you may also be able to improve your credit score as long as you make loan payments on time, in full, and do not incur more debt.
- Bankruptcy – likely has the most detrimental effect on your credit score. THis is because it can remain on your record for seven to 10 years.
The type of debt you have may affect what options you may have
The type of debt determines what kind of relief you can get. For example, debt settlement is usually an option if you have outstanding:
- Credit card debt
- Personal loans and lines of credit
- Medical bills
- Business debts
It may also be an option for you if you are being threatened with repossession or collections, or if you have certain student loan debt. However, debt settlement is not generally viable if you have outstanding debt associated with:
- Legal judgments
- Tax debt
- Car or government loans
- Mortgage or home loans
- Other secured loans
Why choose Debt Rescue Law for your debt relief needs?
At Debt Rescue Law we have a proven track record of helping our clients find peace of mind by finding the best debt relief solutions to suit their needs. Specifically, we have helped them with debt settlement, loan modifications, and bankruptcy. If you are struggling to make monthly payments and you do not know where to turn, call us at 833-707-1234, today!