Debt problems are everyone’s worst nightmare. Application of loans is easy, payment is brutal. Due to lack of better counsel, most people lag in debt and end up frustrated. However, you don’t have to despair. There are many debt repayment options that you can choose from. To pick the best method, considering your situation, consult a non-profit credit assessing organization that will advise you best according to your debt and income. This is a free option. You may also consider researching on the best method that suits you and that which you are most comfortable with.
Debt Management Plan
One of the debt repayment options is by use of debt management plans. You will have to apply at a credit counseling agency that will come up with a plan to help you pay your creditors affordably. They lower your regular payments to affordable prices and also lower the interest rates. As divine as it sounds, it might take 3- 5 years to finish your loans. Your credit score will also improve.
Debt Relief Order
Are you at a point where you are low on assets and your source of income cannot cover your debt? This might be the best option for you. The debt relief order freezes your debt for a year. If you still cannot pay off your loans, your loans are written off. Just like that. Those who are bankrupt or have an Individual voluntary arrangement or are about to be rendered bankrupt cannot however get this option. To apply, one needs to be approved by an intermediary. There is a fee to be paid over a short period of time then when the fee is settled, an official receiver will grant the Debt Relief Order to you.
Individual Voluntary Arrangement
This arrangement freezes all debts and you are given an allowance to pay them back over a certain period of time. When the stated period ends, the rest of the money owed is written off. You can apply for an Individual Voluntary Arrangement if you can pay some if not all of your debt balance. Information such as regular income has to be shown to cover about 5-6 years. Those with huge loans might qualify for this.
There are two types of bankruptcy; chapter 7 bankruptcy and chapter 13 bankruptcy. In chapter 7 bankruptcy, you may receive total relief or most relief of your debt. Your secured collateral will be taken to pay off your creditors. For chapter 13 you are allowed to pay off your debt within 3-5 years. The rest will be written off. You will be able to keep some assets.
Debt Consolidation Loans
For those wallowing in multiple credit card debt or any outstanding loans, this option will assist you. You will have to apply for a debt consolidation loan that will be used to pay off all your multiple loans and you will be left paying only one creditor. The monthly payments will reduce optimally to your advantage and the credit interests too will decrease accordingly. The time you will take to pay off the loan will increase to about 5-6 years but is still convenient.
In conclusion, you can choose any of these options to aid you to get out of debt. For assistance contact a credit counseling organization near you and they will guide you through your journey