Debt Services Primer
Manage Your Finances While Unemployed
Debt is a national problem already. But compound that with the escalating unemployment rate and you have serious financial stress. Wall Street has offered you no fine example to follow. Large “power” businesses have tumbled like lean-tos built of credit cards.
But let’s get personal…How’s your debt situation? Because if you’ve been laid off and the credit card bills, the mortgage, the car payment, the college tuition, the cable and cell-phone bills all continue to roll in like a daily tsunami, then you probably have some high blood pressure going on as we speak. And you’re not alone.
Sure filing for unemployment can get you earning a weekly or bi-monthly “income,” but it’s a FRACTION of what you formerly earned. You probably never thought you’d have to live on your meager unemployment check.
Nuts and bolts: what real debt services are available to you during a job lay-off?
Maybe you’ve already been solicited for a debt consolidation fix through your bank. Does it help?
Debt consolidation loans relieve you of the current debt bills you own. The lender takes your debt, pays off those obligations, and extends you a brand new loan in their place. This loan gives you one monthly payment to make versus many, then usually makes that payment lower than all the others added together. This is the good part of debt consolidation. But a debt consolidation loan can only be provided to you this way when the length of repayment is extended. In some cases your lender could increase the interest rate, as well.
Debt Reduction Services
Right now the marketplace is overrun with people just like you furiously scrambling to find solutions, quick fixes, and debt “cures.” And to fill that demand are dozens, maybe hundreds of debt reduction services that propose to help free you from the money you owe. Debt reduction companies typically offer a range of debt management options, including debt consolidation, debt counseling, and debt settlement and negotiation services.
Settling your debt is the process of negotiating down your debt balances owed to creditors. For example, say you are unable to make your minimum monthly credit card payment… instead of defaulting on this obligation and potentially ruining your credit for years to come—because most people can pay SOMETHING—you or an arbitrator on your behalf can negotiate a deeply discounted final balance settlement. Do-it-yourself debt settlement or hire an attorney or debt settlement company.
Credit/Debt Counseling Services
Businesses that specialize in credit counseling services often sell you a multi-pronged debt management plan. This plan could: consolidate your outstanding debt, provide debt settlement or negotiation, bring delinquent accounts back into good standing, and more. In simplest terms, credit counseling companies intervene between you and your creditors and assume management of your debt obligations.
Tip: If you already have debt collection agencies harassing you via phone and/or mail, find out right now how you can stop it so you can give yourself some breathing room. Read about your rights under the Fair Debt Collection Practices Act.