Compare Debt Relief
Which Option is Best?

Always compare debt relief programs before choosing one, this is essential when you are already at a financial stage need help reducing and eliminating a small or large debt burden.

To compare different programs, read all the debt related information presented here and on this site carefully. You also need to clearly understand your debt and your financial priorities while you compare debt relief programs and should be able to answer the questions regarding why you need a debt relief program. In addition, success ratios, payment policies and the cost involved in all the different programs must be clearly understood before making a decision.

Debt Relief Options

There are five main debt relief options. Each one has different parameters on which you can compare debt relief options. However, you first need to understand each one of them.

Debt Consolidation Loan/Refinance Loan: This option should be considered if you have very good credit and adequate equity in your home. A new low interest loan can cover all your outstanding debts and bring down the interest rate on all of them.

Credit Counseling: If your income puts you in a position to pay at least 3% of your debt each month and you want to avoid collections, you can seek this option. Credit counseling will use lower rates and monthly payments to pay off your debts sooner.

Debt Settlement/Debt Resolution If a negative hit to your credit rating is not a concern and you want to get out of debt quickly, then you can look at this option. A debt settlement firm will negotiate your debt balance downwards, but you must be able to settle it at once. You end up paying less than you owe, but your credit rating takes a hit.

Bankruptcy: If you cannot afford any kind of monthly payment, then the only way out is filing for bankruptcy. A legally appointed trustee will then take over the liquidation of your assets.

Self managed: If you think you understand your debt completely and can negotiate terms on your own for a lower interest rate and monthly payment, then go for it. No one can help you better than yourself. Plus, there are no fees attached to this type of debt relief.

Before selecting any course of action, make sure you completely understand your debt relief options. You should lay out your priorities and determine your what, if any, ability you have to pay off the debt. A miscalculation here at the beginning basic step will make the success in the end far more difficult to achieve. You may even be left with an even bigger debt. A reputable debt relief program or company will help you understand the intricacies of each option.

Many debtors think that bankruptcy is the only option to get out of a financial mess, but in reality this option should be considered a last resort. Don't file prematurely. You need to compare debt relief options in detail before you reach any decision.

Questions to Answer for Each Debt Relief Option

There are certain important questions that need to be answered before you choose an option; each of the five options has a different impact on these questions. Once you can answer these questions for each option that may apply to your situation, only then should you move forward with a decision.

• Will you be able to get a reduction in the principal amount?
• Can the high interests on your debts be reduced?
• What about the fees payable to debt relief firms/law firms/attorneys?
• Do you need to pay extra taxes if you enroll in a debt relief program?
• Can you maintain privacy while eliminating your debts through debt relief programs?
• Will debt relief programs lower your credit worthiness?
• How can a debt relief program hurt your credit rating?
• Can you discharge secured debts through debt relief programs?

Before deciding on any option suggested by a counselor or program, check to see whether the debt relief company in question is a member of the Association of Settlement Companies. Members of TASC adhere to certain standards and operate within the law laid down by the government. Compare debt relief company's credentials to pick the best one for you.

It is always wise to compare debt relief options as well as the debt relief programs before choosing one. You can always go to a debt relief network, weigh out the success ratio of different options, and get reviews on their programs. By doing your own research you will be sure to end up with a legitimate debt relief company that will help you in getting out of your debt the quickest and cheapest way.