Learn About Debt Relief: What It Is And When You Should Seek It

When You Should and Should Not Seek Debt Relief

Debt consolidation may not be appropriate for everyone. So, before delving into the possibilities, it’s essential to understand who debt relief is appropriate for.

• You’re falling behind on credit card bills or other loan installments.

• You are not yet behind on your bills but are having difficulty making payments.

• You’ve attempted to handle your debt independently, but you’re not making any headway.

• You’ve considered declaring bankruptcy. If you continue to add to your debt balances, debt relief may not be for you.

• You are unwilling to make a long-term commitment to debt repayment.

Debt relief may not be enough if you’re still incurring additional debt. You may also need to address your debt-causing spending behaviors.

Debt Relief Options

Debt consolidation is not a one-size-fits-all answer. There are several approaches you might take based on how much you owe and what type of interest rates you’re paying. Here’s an in-depth look at four of the most popular debt relief choices.

Debt Consolidation

If you have many loans or lines of credit to repay, you may want to consider debt consolidation. But what exactly is debt consolidation, and how does it work?

Debt consolidation is the process of consolidating many debts into one. You could, for example, take a personal loan to combine debt from various credit cards.

Another option for credit card debt reduction is balance transfers. In this instance, you’d open a new credit card account, preferably with a low or 0% annual percentage rate, and transfer your previous balances to it.

When you consolidate your debt, you will have one payment each month. However, it may or may not save money on interest. It’s also critical to understand the benefits and drawbacks of debt consolidation.