What is the Best Debt Relief Option?

If you are tired of debt and the limitations it imposes on your life, you need a plan to radically alter your financial situation. Here are some of your debt resolution options:

• Do It Yourself debt reduction
• Debt settlement plans (DSPs)
• Credit counseling and a debt management plan
• Bankruptcy Debt consolidation loans

We know that choosing the optimal method of debt relief can seem overwhelming, especially when you are already dealing with the stress that debt causes. That's why we recommend that you speak to a ClearOne Certified Debt Specialist, who will help you determine which of these options suits your particular needs.

Here's a brief overview of what each type of debt relief involves.

Do It Yourself Debt Reduction

You may be able to reduce your debt on your own if:

• You have a steady income.
• You are current on payments.
• You can pay more than twice the monthly minimum on your credit cards.

Through the Snowball Method, you go after the credit card with the smallest balance first, while paying the minimum on the other credit cards. This way, you retire one card at a time. The Avalanche Method requires you to retire the credit card with the highest interest rate first.

The advantage of DIY debt reduction is that it does not hurt your credit score and it does not cost anything beyond what you owe plus interest. The disadvantage is that you may find that you are not making real progress toward your goal of freedom from debt. In that case, you can always consult with a ClearOne Certified Debt Specialist to analyze your situation and explore other options.

Debt Settlement Plans (DSPs)

Debt settlement plans are often a good option for people who owe more than $10,000 in unsecured debt like credit cards. If you are struggling to make the minimum monthly payment on credit cards or are making little to no progress in paying off the principal amount of debt you owe, a debt settlement plan can help you get back on track.

When you choose a debt settlement plan with ClearOne Advantage, we do all the heavy lifting for you. Here's how it works:

Learn More How Debt Settlement Works

Credit Counseling and Debt Management Plans

Credit counseling/debt management is a form of debt consolidation that may work well for people with $5,000 to $10,000 in unsecured debt. It allows you to bundle multiple credit card debts into a single package, making a single monthly payment with lower interest rates and possibly forgiven penalty fees.

Credit counseling may have a slight negative impact on your credit score, and there are some upfront fees as well as monthly management fees to consider.

Bankruptcy

Bankruptcy should be considered a last resort for those who can see no other way to free themselves from debt. A successful bankruptcy filing creates an automatic stay that protects you from creditors for the duration of the process.

Filing is complicated, however, and working with a bankruptcy attorney is usually required and there will be fees involved. Even if your bankruptcy filing is successful and you are able to discharge some or all of your debt, the severe impact on your credit score lasts for 7-10 years.

Is Bankruptcy the Right Option for You?

Debt Consolidation Loans

Debt consolidation loans aim to replace your multiple, high-interest credit cards with a single, low-interest loan. This way, they consolidate your monthly payments into a single payment under more favorable terms. These loans may be suitable for people with excellent credit.

Debt consolidation loans feature payment periods of 36-60 months. The main danger of “paying off one debt with another” is that you may feel tempted to start using your paid-off credit cards again. Another danger is that, because some debt consolidation loans are secured, you risk losing assets you use as collateral for the loan if you default on your payments.

Learn More About Debt Consolidation Loans

Is Debt Relief Right for You?

A ClearOne Advantage Certified Debt Specialist can help you to determine if debt settlement is the right option for you, as well as help you put together a customized solution to fit your financial situation. Defeat your debt the smart way. Find out how.