A Straight Talk on Debt

A Straight Talk on Debt gives you the real deal on debt, straight from our employees and personal finance experts. Learn more about debt relief plans and how to be financially fit.

Knowing Your Debt Relief Options

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There comes a time in many of our lives where we realize we are in over our heads, financially speaking. We come to the conclusion we need to do something about our finances, but what?  

There are several options when it comes to debt relief and one of them is right for you, your situation, and your family. When deciding what to do there are a few questions you should ask yourself first; your answers may help you determine what you need to do, where to turn and how to get help if you need it.  

So let's get started!  

 

  • Do you have unsecured debt ?
  • Do you keep a monthly budget and track of your income and expenses consistently? If you need help getting started check out this budget tool.
  • Are you able to keep up with your minimum payments and afford a little extra to pay down your balances?
  • Do you want to get out of debt more quickly and save money on interest?  

If you answered yes to these four questions, you may want to consider a Do-It-Yourself approach to managing your debt.  

Do-It-Yourself with Debt Payment Pro.  Debt Payment Pro is a FREE tool that can help you pay down your debt. Enter simple information about your debts. Based on your debts Debt Payment Pro will calculate your possible savings. Then follow your personalized repayment schedule to pay off your debt more quickly and save on interest. It can become easy to send just the minimums and not reallocate payments to other creditors. This approach will require discipline and close attention to your payments. 

  • Do you have at least $2500 in unsecured debt with a minimum of 2 accounts?
  • Are you behind on payments or having trouble paying the minimum payments?
  • Would you like to make one monthly payment with better repayment terms from most of your creditors, such as lower interest rates and waived late fees to help you get out of debt more quickly?  

If you answered yes to these three questions, you may want to consider a Debt Management Plan (DMP).  

Debt Management Plan.  Debt Management Plans, which are often called DMPs, are plans that allow debt relief providers to work directly with creditors to secure benefits. These benefits, which vary by creditor, typically include reduced interest rates, lower monthly payments, and waived fees such as late fees and over the limit fees.

 Do you have a minimum of $7500 in unsecured debt?

  • Are you currently behind on your unsecured debt payments and receiving collection calls?
  • Do you have the ability to pay back at least 50% of your debt plus success fees?
  • Would you like an approach to debt relief in which negotiation with your creditors on your behalf to accept payment of a percentage of your unsecured debt to satisfy your entire unsecured debt? 

If you answered yes to these two questions, you may want to consider a Debt Settlement Plan (DMP).  

Debt Settlement Plan.  Debt Settlement is an attractive alternative to bankruptcy for those who want to pay back at least a portion of their debt, but cannot afford the Debt Management Plan payment, and have stopped paying their unsecured creditors. With Debt Settlement, you make monthly deposits to a Settlement deposit account in an amount you can afford. You do not make monthly payments to your creditors, and your provider works to negotiate with your creditors for a less-than-full repayment. When settlements are reached with creditors, settlement payments are paid from the Settlement deposit account. There are definitely pros and cons to using Debt Settlement to pay off your debt.

  •  Are you currently behind on your unsecured debt payments and receiving collection calls?
  • Do you find that you are unable to make any payments on your unsecured debts? 

If you answered yes, to these two you may want to consider Bankruptcy.  

Bankruptcy.  If your financial situation leaves you unable to pay back even a portion of your debt, you may want to explore whether a bankruptcy makes sense for you. We will review your situation and if bankruptcy appears to be appropriate, we will connect you with a national law firm to help walk you through your bankruptcy options.

Still not sure or need help deciding? Please feel free to contact us to speak with a Certified Credit Counselor who can help.

Related Posts

Questions You Should Ask Before Signing Up for a Debt Relief Plan

Understanding Secured Debt versus Unsecured Debt

Resource Guides: Educate Yourself to Become Debt Free

Suzanne Cramer

Suzanne is a certified credit counselor working in our Ask the Expert forums as a coach and a Social Media Specialist for CareOne. Suzanne writes for our Divorce, Debt and Finances and A Straight Talk on Debt blogs.  Follow Suzanne on Twitter where she shares the latest debt industry news and tips to keep your finances in check with her ADivorcedMom and AskCareOne accounts.

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  • No really, what ARE you waiting for? I am talking to those that are reading this that are debating whether

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