5 Debt Solutions that DON’T Spell Bankruptcy

Editor, Meha Ahmad
Written by Anna Neiger, Debtsolutions.com Writing Team

Things may look bleak, but debt solutions can ease the mind and help keep your credit’s integrity when you need it most—without filing for bankruptcy!

Let’s face it, people; we are in the middle of an economic crisis. Jobs are hard to keep, harder to find. Companies are making cuts where they can. Business is down—even great conglomerates like Starbucks and Walmart are closing stores and laying off workers across the nation. And it seems like everywhere, people are in trouble with debt.

There are ways out. There are debt solutions to help you keep your head above the water in this declining economy and help you avoid the exhausting process of filing bankruptcy.

Debt Solution #1: Try To Avoid Debt in The First Place
The best debt solution is to avoid debt as best you can. Create a budget for yourself and stick to it. Knowing how much money comes into your household, and how much you spend each month will help you eliminate frivolous spending that drives your debt up and your credit score down.

If you’re having trouble making ends meet, talk to your creditors right away. They’ll most likely have a debt solution built in—a “grace period,” or a way to lower monthly payments and interest rates before you get into trouble.

Debt Solution #2: Credit Counseling
If you’re having trouble sticking to your budget or you feel your debt is out of your control, credit counseling is a good debt solution option. A lot of credit counseling agencies are non-profit and will work with you in person, over the phone or on the internet to get you back on track.

Debt Solution #3: Debt Consolidation
When you consolidate debt, you choose the company to help you and what accounts (like credit cards and loans) you want them to help you with. Then the company contacts your creditors and negotiates with them to lower monthly payments and eliminate fees and interest rates. You then pay the company one lump sum every month which goes to cover each account you listed for debt solution.

Debt Solution #4: Debt Management Plan (DMP)
A debt management plan looks at all your debt, considers your income and budget and works with creditors to lower monthly payments. You can work with a free creditor-sponsored DMP organization or with one that charges a fee, either of which can help repair damaged credit.

Debt Solution #5: Debt Settlement
When you choose debt settlement as your debt solution option, you work with your creditors to establish a one-time reduced sum which the creditor counts as a payment in full. While this debt solution option eliminates your debt, it may mangle your credit score.

Just remember, you may be feeling overwhelmed by the economic slump, but there are always debt solutions available to you!

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