- debt consolidation plan: This is one of the solutions to credit card debt and other bills. Here creditors agree to cut down the interest rates and eliminate or reduce late payment charges. You need to make a single monthly payment to your consolidation company which then distributes the money to your creditors. Watch out for the 8 debt consolidation benefits.
- Debt Settlement: With this method, the company helps you to negotiate and reduce your outstanding debt/bills by 40-60%. You'll have to pay a fixed amount each month to your settlement company. The payments accumulate into lump sum cash after months. The lump sum cash is then paid off to your creditors.
- Debt Management (DMP): This involves a credit counseling session wherein a credit counselor analyzes your finances and debts. The counselor prepares a budget for you so that you can put in more cash towards debt payment. If you are knee deep in debt, the counselor may suggest a DMP wherein he negotiates with your creditors in order to lower the interest rates and cut down late fees.
- Self Repayment plan: This is a self-help plan using which you can pay off debts on your own. No professional help is taken here. The self repayment plan will be successful if you follow a tight budget on a monthly basis.
- Bankruptcy: Filing bankruptcy is no doubt one of the debt solutions. But it should be considered as your last resort because it hurts your credit and brings down your score by 200 points or more. Hence it's better to avoid bankruptcy and look for other debt solutions.
- Ostrich Method: This method of dealing with debt involves taking no steps to pay off debt. It is based on the concept that you ignore debt and it will vanish. However, it is not advisable to ignore debts because your credit will be ruined if you don't pay. Moreover, your creditors may sue you or the collection agencies may harass you constantly.
This is Just my try to give You small help on Debt Consolidation Solutions, I will keep doing my best to find and give You best solutions for solving your debts.
