Pro Debt Reduction - Bad Debt Help

Bad Debt Help

When it comes to getting bad debt help, you have plenty of options, believe it or not.

Options for Bad Debt Help

When you need bad debt help, you might want to look into a debt management program. There are debt help services that have programs for bad debt help that an have you debt free in five years. Bankruptcy is no longer the only option for those in need of bad debt help. In fact, Congress passed a law in 2005 requiring that anyone filing for bankruptcy to go through some sort of debt management program first. This is to reduce the number of people who file for bankruptcy.

You might be wondering what kinds of programs there are for bad debt help. Believe it or not, there are four that deal with unsecured debt (like credit card debt, for example) and one that deals exclusively with student loan debt. Here's a brief overview of each of these debt help programs:

Debt Consolidation - What happens under this type of program is that a debt consolidation company contacts your creditors to get your balances reduced by getting fees removed and interest rates lowered. Then they combine all the new balances and you pay the debt consolidation company one payment each month. They make sure your creditors get their money, and your balance is paid off in five years.
Debt Consolidation Loan - This isn't really like debt consolidation at all because it doesn't get you any reductions like debt consolidation does. It's just a loan given to you to pay off your unsecured debts all at once. Then you just have the loan to pay back. However, you have to have collateral. The benefit is that the interest rate on the loan is so low that you can be out of debt in five years!
Debt Consolidation Mortgage - You have to have a house to get this debt management program. You can't be renting. A debt consolidation mortgage is essentially a loan from your mortgage company to pay off all your unsecured debt. Then that amount is added to your mortgage, so you're essentially paying off all your credit card debt at the same low interest rate as your mortgage. Be aware that your mortgage payment does go up, but not by much.
Debt Settlement - When you enroll in a debt settlement program, a debt settlement company contacts all your creditors to get your balances reduced by 60-80%. Granted, 60-80% off is a great sale, but in this case, it's money you actually spent, so you have a moral obligation to pay back at least that much. There's nothing wrong with trying not to pay interest and fees, but you should at least try to pay back what you spent. Anyway, if your creditors agree to this, they will want their money right away. And they'll report it to the credit reporting agencies and it will have a negative effect on your credit.
Student Loan Debt Consolidation - This is the one we mentioned that deals strictly with student loan debt. It combines all of your student loans, gives them one low interest rate and lowers your monthly payments by as much as 50% because they stretch them out over a longer period of time.

Perhaps one of these programs can help you get out of debt! You will only know when you take the time and get the consumer debt help that will point you in the right direction.