Facing the current economic meltdown, it is considered wise that every citizen should to learn about ways to protect yourself from debt.
To do so, a person can start by curbing his expenditure especially on the credit card.
Spending on things that fall under basic necessities like paying mortgage, food and house hold, tuition fees etc, and eliminating expenses like going for movies and dinner outside, unnecessary subscriptions, vacations etc should be severely controlled till the time the crisis resides.
Sometimes, even with a lot of precautions end up with a huge burden of unsecured arrears.
For them there are a few good debt relief options available, and they can choose the one that suits them best.
The first and the best among these is the negotiation and settlement procedure.
This process involves negotiating with the creditors to reduce the outstanding balance.
After the negotiation process, an amount is decided upon by the creditor which is agreed by the debtors as well, and this amount is far lesser than the original due.
This is called settlement.
The settled amount and the conditions of repayment are taken in writing from the creditors.
By this debt relief option many consumers have been able to eliminate their unsecured arrears by 50% or more.
To protect you from debt, consolidation can be a very good option.
Consolidation refers to taking one loan to pay off many others.
A consumer may have incurred many unsecured arrears at the same time.
Dealing with each creditor individually is a hassle.
In such cases, the debtors brings all his outstanding balances together, calculates his total due amount, negotiates where it is possible to negotiate and reduce the amount, then takes one single loan to pay off all the others at a go.
There are many benefits to this option of credit relief.
Firstly, the consumer will have to pay a single monthly installment instead to only the loan providing company.
Secondly, being secured this loan carries far lesser interest compared to the ongoing market rates.
Thirdly, if the number of installments is more then the consumer will have to spend less from his income every month.
This way he will be able to save and reconstruct his financial stability.
Debt reduction planners and credit counseling are also reliable ways to protect you from debt.
Before taking up these services a consumer should verify the authenticity of the companies providing them.
This is applicable for the first two options as well.
If the company that is providing credit relief services is not genuine, then the consumer will face more difficulties than the burden of debt itself.
Chapter 7 and chapter 13 bankruptcy declarations are also ways of relief from unsecured arrears.
But these two should be avoided at any cost because it causes more harm than relief.
In the former all the assets of the consumer is liquidated and the due is paid with it.
A person can lose his house in this process.
In the latter, a huge amount of the arrear is paid through court.
For the first five years the court manages the disposable income of the consumer.
By far, the first two options have proved to be the best in eliminating unsecured arrears.
Consumers should opt for these in case of any difficulty in repayment of dues.
To do so, a person can start by curbing his expenditure especially on the credit card.
Spending on things that fall under basic necessities like paying mortgage, food and house hold, tuition fees etc, and eliminating expenses like going for movies and dinner outside, unnecessary subscriptions, vacations etc should be severely controlled till the time the crisis resides.
Sometimes, even with a lot of precautions end up with a huge burden of unsecured arrears.
For them there are a few good debt relief options available, and they can choose the one that suits them best.
The first and the best among these is the negotiation and settlement procedure.
This process involves negotiating with the creditors to reduce the outstanding balance.
After the negotiation process, an amount is decided upon by the creditor which is agreed by the debtors as well, and this amount is far lesser than the original due.
This is called settlement.
The settled amount and the conditions of repayment are taken in writing from the creditors.
By this debt relief option many consumers have been able to eliminate their unsecured arrears by 50% or more.
To protect you from debt, consolidation can be a very good option.
Consolidation refers to taking one loan to pay off many others.
A consumer may have incurred many unsecured arrears at the same time.
Dealing with each creditor individually is a hassle.
In such cases, the debtors brings all his outstanding balances together, calculates his total due amount, negotiates where it is possible to negotiate and reduce the amount, then takes one single loan to pay off all the others at a go.
There are many benefits to this option of credit relief.
Firstly, the consumer will have to pay a single monthly installment instead to only the loan providing company.
Secondly, being secured this loan carries far lesser interest compared to the ongoing market rates.
Thirdly, if the number of installments is more then the consumer will have to spend less from his income every month.
This way he will be able to save and reconstruct his financial stability.
Debt reduction planners and credit counseling are also reliable ways to protect you from debt.
Before taking up these services a consumer should verify the authenticity of the companies providing them.
This is applicable for the first two options as well.
If the company that is providing credit relief services is not genuine, then the consumer will face more difficulties than the burden of debt itself.
Chapter 7 and chapter 13 bankruptcy declarations are also ways of relief from unsecured arrears.
But these two should be avoided at any cost because it causes more harm than relief.
In the former all the assets of the consumer is liquidated and the due is paid with it.
A person can lose his house in this process.
In the latter, a huge amount of the arrear is paid through court.
For the first five years the court manages the disposable income of the consumer.
By far, the first two options have proved to be the best in eliminating unsecured arrears.
Consumers should opt for these in case of any difficulty in repayment of dues.
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