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Debt Relief

 

 

 

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As of 2020, US households have more than $880 billion in credit card debt; this is a staggering number that impacts millions of American's lives. We may aim to pay off our credit card debt in full each month, but too many of us don't succeed. Rising costs of living, stagnant incomes, unexpected life events, and undisciplined spending are common factors that lead to growing numbers of Americans struggling to get out of debt. Factor in the high-interest rates that creditors are allowed to charge, and finding a way to manage your debt effectively can be a challenging task.

How to Get Rid of Debt

An important first step to achieving debt relief is to look at the different ways you can solve your debt problem, whether working on your own or with a professional debt relief firm. One place to start is to assess who you owe, how much you owe, and the lifetime cost calculations of paying off that debt. You can start with this handy debt consolidation calculator tool.

Debt Relief Considerations

APR

Total Lifetime Costs

Monthly payments

Monthly payments

credit score

Impact on Credit

 

Comparing Debt Relief Options

It is challenging to compare debt relief options since each person's financial situation is unique. Some debt relief options require taking out a loan, some require homeownership, and some are very aggressive and designed only for consumers with serious financial hardship. Bills.com offers you in-depth information about the various debt relief programs. If you do your homework, then you can find the right debt relief solution for your unique financial situation.

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A Few Debt Relief Options
  1. Maximize your payment schedule.

    If you are in a strong financial position and can afford to make more than your minimum debt payments, then consider a do-it-yourself debt relief solution. Two common strategies are the snowball or avalanche payment plan. By optimizing your monthly payments into a fixed amount, you can significantly reduce the time to get rid of debt and lower your overall costs.

    If you have good to excellent credit and want to make life easier by consolidating your debt and bills into one payment, then a personal debt consolidation loan is an excellent option. Debt consolidation loans usually have a payback period of between 2-5 years, so shop around for a loan that has an affordable payment and offers you substantial financial savings.
  2. Somwhat struggling? Lower your interest rates.

    Credit counseling is a debt relief program that starts with a detailed financial review. If your debt problems are serious and best resolved with outside help, your credit counselor will suggest that you enroll in a debt management plan (DMP).

    In a DMP, the credit counseling program will obtain interest rate concessions from your creditors. Lower interest rates are the primary benefits of a credit counseling program. Credit counseling may also lower your lower monthly debt payment, but usually not significantly. 
  3. Struggling? Need debt relief now?

    Debt settlement is a debt relief program that negotiates and settles your debts for less than you owe, many times reducing debts by as much as half, before provider fees. Debt settlement is an option for people who are in financial hardship and cannot afford their monthly payments.

    You stop making payments to your creditors and instead make payments into a designated account. Generally, once the negotiators reach an agreement, you make a lump-sum payment. Be aware of the credit impact and the potential collection harassment from your creditors.
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The Bills.com Debt Payoff Calculator

If you are still not sure which is the best option for your case, then check out Bills.com's Debt Payoff Calculator.

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