Are you a debtor facing some struggles with repaying your debts and need some debt relief?
If so, this is likely a very stressful time for you and can take a real toll on your mental health and well-being!
If this is some circumstance and you don’t know what to do, try not to panic; help is available.
Debt relief is a great way to help pay off your debts in a manner that suits your lifestyle and current financial situation.
There are several factors related to debt relief that you should take into account, as well as a couple of types that vary in suitability depending on your needs.
This means that information about relief from your debts before simply springing into the first option you come across is vital and you should take time and gather information to find out what suits you best.
This article will discuss the main details of debt relief and how it can help you to pay off debts in a way that suits you.
What is Debt Relief?
So, debt relief sounds great, but what exactly is it? The term “debt relief” refers to a variety of systems and processes that can make debt repayment easier for you, as a struggling debtor, to manage.
As mentioned, there are several types and forms of relief from your debts that will look and work vastly differently with you depending on what it is that you are struggling with.
For example, someone that is struggling with student debts and someone that is struggling with credit card debts may pursue vastly different routes with debt relief.
Furthermore, someone who is struggling to pay due to their inability to manage payments and someone that is struggling to pay due to financial struggles may also look for different forms of debt relief.
Each type and method of debt relief will come with its individual benefits and consequences, consequences that some may not be able to manage and benefits that some may not need depending, again, on their particular circumstances.
In simple terms, relief from your debts helps someone that is struggling in their journey to become 100% debt free. After all, that is the dream, right?
How Does it Work?
Now we’ve discussed what it is, but how does it actually work?
A system of helpers is in place to assist you to get out of all of your debts. Debt relief sounds too good to be true.
Fortunately, it is not and has helped many people manage their debts in their way, working toward a debt-free future for them!
Similar to the benefits and consequences of relief from your debts, how it works depends heavily on the option or means of relief you decide is best for you.
There are several ways in which relief from your debts can help you depending on whichever option you decide upon.
One of the ways debt relief can help is by lowering interest rates, meaning you will be required to pay a lower sum of money over time in interest on the debt or debts.
Another way it can help you is by changing the terms of loans to fit you more appropriately. The list is long for the benefits debt relief can bring you!
When Should I Use Debt Relief?
As discussed, debt relief can come with some negative impacts that can hurt your financial situation or make the debt worse for you.
This is obviously not the goal of relief, so you must consider your options before simply diving headfirst into a debt relief plan.
So, when should I and when should I not pursue relief from your debts? This question is quite broad so the answers that will be discussed are not necessarily an all-inclusive list, so do your research and take time to think before engaging in it.
When you should use debt relief:
- You are behind on debt repayments or credit card bills
- You are struggling to afford to pay debt payments to a point that you will soon be unable to pay
- You have tried extensive measures to manage your debts to no avail
- You have seriously considered filing for bankruptcy
When you should use debt relief:
- You have continued to pay debts but are struggling slightly
- You have missed one singular payment
- You have not yet tried to manage your debts on your own
Types of Debt Relief
As discussed at several points, there are several options to choose from for relief and will suit your differently depending on the route you go with and what you need the relief for. The 2 most common types of debt relief are as follows:
Debt Consolidation: Debt consolidation is one of the choices you may select your debt relief types from and can be very helpful when paying off debts.
Debt consolidation is the process of taking out a loan to pay off some or all of your other debts, and then proceeding to pay off the single loan.
How would this help, I would still be required to pay off the same amount of money.
Well, this is not necessarily true. While the amount you borrowed will be the same as the debts you paid off, it gives you the option to renegotiate terms to fit your current situation better.
You can find a lender that offers better payment terms or even lower interest rates, so you don’t have to pay as much money.
Debt Management Plans: Debt management plans are another great way to pay off your debts in a way more customised to you.
To begin your debt management plan, you must select which debts will be enrolled in the system.
Once this has taken place and you have begun your plan, you will be required to make a single payment to the debt management plan each month, which will then be split amongst the creditors of the selected debts.
Depending on the debt management plan selected, you may be able to have some fees dropped and your interest lowered.
Furthermore, it simplifies the payment process by putting you in a position to make a single payment that goes towards all chosen debts.
Key Takeaways
Debts can be difficult to manage.
Between all of the payments you have to make toward them and simultaneously balancing all of the other expenses in life, it’s hard to keep up!
This is why debt relief systems are in place; to help you remove yourself from poor financial situations.
Remember to do your research before entering into any form of debt relief, however, as it may have consequences you are not aware of.