Legitimate debt relief methods are available today in several forms. In these times of deep recession and record high unemployment, many people find themselves owing more than ever while income resources are reduced or completely eliminated. Millions are searching for the best way to reduce and eliminate debt and get their financial house back in order. Debtors are turning in record numbers to debt relief companies and/or bankruptcy. Some debtors, however, are finding relief in another legitimate and perhaps more satisfying method: retiring debt by creating a legitimate online income stream on the Internet with which to pay off debts and achieve financial stability.
Recently consumer-oriented debt relief programs have become very widespread as the FTC issued regulations that support consumer negotiations with debtors to reduce their balances by as much as 40% or more and to regulate how much the debt relief companies can charge for this service. People with more than $10,000 in unsecured credit debts are contacting these debt reduction companies and are setting up planned debt reduction accounts with them. The debt reduction company has the debtor re-direct their monthly credit payments to the debt relief company itself who sets up a debt relief accumulation account for the debtor and watches as the balances grow to a level where negotiations are possible with the creditors. As the creditor sees the debtor payments increasingly in arrears, they become more willing to accept reduced debt payoff terms with the debt relief company on behalf of the debtor.
Drawbacks to the debt relief company route is that the creditors engage in non-stop contacting of the debtor to request at least minimum payments be made and during this time, the debtor’s credit rating drops as periodic payments are not being made. After a number of months depending on the amount in debt, the debtor has a substantial sum built up with the debt relief company, who, in turn, eventually contacts the creditors and offers to pay the debtor’s account in full based on a reasonable reduction in the balance due. Eventually the debtor’s credit rating recovers once the accounts are paid in full according to these negotiations. At this stage, credit reports show accounts paid satisfactorily as the creditor has agreed to the terms and the debt 結餘轉戶 tu relief company has paid them off in full for the debtor. The debt relief company is allowed to charge a fee as a percentage of the amount of debt that is reduced through their negotiations and their fee is charged out of the debt reduction fund that is accumulated by them for the debtor. Using this method It is possible for a debtor to greatly reduce and/or eliminate debt and end up with a decent credit rating if done properly.
One can also file for bankruptcy as another alternative. This is a formal process whereby debtors are protected from creditors while the debtor works with the bankruptcy court to either reorganize the debts in a Chapter 13 or to literally walk away from them under a Chapter 7. Many time consuming court proceedings occur and the process is complicated. Bankruptcies will remain on one’s credit report for many years and, while debts can be reduced and/or eliminated in bankruptcy, it can cause a credit rating to be impaired to the point where it may take the debtor as much as a decade or more to recover to an acceptable credit rating. And, while one can represent themselves in bankruptcy court, it is usually wiser to hire a bankruptcy attorney to guide one through the difficult court processes. Of course, the legal fees can be substantial.