Exploring Options for Getting Out of Debt

If you are drowning in debt and you’re exploring the idea of filing for bankruptcy, you might want to look into other options first. Namely, you might want to consider getting help with debt negotiation.

According to experts in the field of debt negotiation, the average consumer seeking this service has accumulated an average debt of $30,000. Most of this debt is on credit cards and was typically acquired as the result of some type of financial hardship.

In many cases, those seeking debt negotiation assistance experienced a sudden job loss, got a divorce, or had some other major event take place in their life that forced them to lean heavily on their credit cards. In an attempt to stay on top of their bills, they used their credit cards to make payments and ultimately found themselves unable to keep up with the payments.

For a consumer that finds himself in a great deal of debt, he or she has basically has four options for getting out of debt. These include paying the debt off over time, getting credit counseling, filing bankruptcy, or seeking help with debt negotiation.

For many, paying the debt off themselves is not an option because they find themselves over-extended and unable to make the required minimum payments. In addition, paying off a huge debt by paying only the minimum payment can take a very long time and cost a great deal of money. According to one expert, paying off a $30,000 debt in eight to 10 years will require paying a monthly payment of $1,200 and will result in a loss of nearly $130,000 in finance charges.

If you take that same debt and get help from a debt negotiation expert, you can significantly reduce the amount you pay each month as well as how long it takes you to pay it. Most experts can get the monthly payment reduced to around $500 and can get you out of debt within three years or less.

If you have the means of paying the debt off yourself, it is still better to go this route. Although having debt negotiation on your record isn’t as bad as having a bankruptcy, it can still cause your credit score to take a major hit. Ideally, you should find a negotiator that will get your payments reduced and that will work out a deal with the credit card company that prevents the negotiation from being reported to the major credit bureaus. That way, you can get out of debt quicker and your credit report won’t feel the burn.