Options for getting out of debt

 

Contributed by the Better Business Bureau

It isn’t difficult to fall into debt, but getting out of debt may seem an insurmountable task. If you have a big pile of credit card bills, you may also have a big pile of credit repair or debt relief offers. Those promises of reduced debt, low-interest loans, and magical fixes for your credit score can be tempting, but you need to be very careful to make sure nobody is taking advantage of you. BBB provides the following information to help make your journey smoother.

“There is no one-size-fits-all resolution”, said Mechele Agbayani Mills, President and CEO of BBB serving Central East Texas.” It’s important to find the solution that fits the details of your particu­lar financial situation.”

BBB provides the following information about the differences between credit counseling, debt relief, debt consolidation and credit repair.

Credit counseling is the most complete solution, using various resources to help you solve your money problems. It also requires the most work from you and does not promise quick relief. Tools include budgeting, educational programs, counselors, and a per­sonalized plan. Credit counseling may (but does not always) lead to a Debt Management Plan (DMP) where you pay money into an account and the agency pays your debts from that account.

Debt relief or settlement companies say they can reach out to your creditors and try to get them to lower your balance, interest rates, or fees so you pay less. You can also try to do this yourself to avoid the fees that a company like this will charge you.

Debt consolidation companies offer you loans to pay off your debts in one lump sum. The low interest rates are tempting, but once you go through the application process you may find more fees. You may also be able consolidate and pay off your debt through a second mortgage or home equity line of credit, but be very careful. As you are putting your home up as collateral, if you cannot make your payments, you could lose it.

Credit repair companies promise to clean up your…

 

(To continue reading this article, please contact us today for a print or email subscription to the Jefferson Jimplecute! — (903) 665-2462, JIMPLECUTE1848@GMAIL.COM)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s