Debt Reduction Service

Pay Off Debt with a Debt Relief Program

Are the repayments on loans and credit cards too high? Reduce monthly payments and eliminate debt. Find out how a debt reduction service can help you to get out of debt.

An increasing number of families have found that the repayments on unsecured loans and credit cards are unsustainable for the full duration of the agreement. Whilst this is often due to a change of personal circumstances (poor health, unemployment or divorce), it is sometimes because a family has taken on far too much personal debt. Although a debt reduction service involves defaulting on one or more credit agreements, it helps a family to restore parity to their finances.

Ease the Financial Burden with a Debt Reduction Service

Whilst some people are able to pay off debt through better budgeting, others turn to a debt management plan or debt settlement program. The appropriate debt solution can address an imbalance between income and expenditure in up to two different ways. This is achieved through a reduction to the amount owed (principal) and/or a lower repayment each month. Either of these debt relief programs will alleviate much of the financial pressure that was previously experienced.

A Debt Settlement Program to Get Out of Debt

Following an involved negotiation process, the majority of unsecured creditors are prepared to forgive up to 50% of debt in return for a repayment over a 12, 24 or 36 month period. Not surprisingly, any debt forgiveness doesn't take place until the final scheduled payment has been made. A debt settlement program is often seen as the main alternative to chapter 7 bankruptcy, although it doesn't provide the same court protection from creditors. The benefits are that it isn't necessary to appear at court, the matter isn't made public and it will only show on a credit report for seven years (rather than 10 years).

Pay Off Debt with a Debt Management Plan

Unlike a debt settlement program, there is no reduction to the principal. The objective of a debt management plan is to improve affordability and reduce the pressure experienced from dealing with creditors. Rather than making multiple payments, a single sum will be sent to an intermediary and they disseminate the proceeds to creditors on a pro rata basis. A lender may freeze further interest and charges to help a borrower get out of debt more quickly. This debt reduction service is normally the preferred option for dealing with lots of small debts. The lower monthly sum could mean that it takes longer to pay off debt.

The Pros and Cons of a Debt Relief Program

A debt reduction service, such as a debt management plan or debt settlement program, could prove to be priceless for a family that is over-burdened with debt. However, it will be necessary to default on a credit agreement and this will result in a low credit score. A fee of 15% of each monthly contribution will be taken to manage either debt free solution.

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