Getting rid of collectors and crazy stalking letters can be somewhat of a hassle. Usually the bill collectors will even contact the people you put down as a reference to make sure they have a way to reach them in times of default. Yet, even after you change your phone number or move to a new residence it’s important to know exactly how to make them all go away permanently.
Yes at one time going with a debt consolidation was a good thing to do however the biggest competitor dealing with getting rid of unwanted debt is a bankruptcy attorney and a credit repair expert. Comparing the services and the costs to consolidate your debt versus bankruptcy or credit repair is a pretty big gap.
For example if you look at consolidating your debts on your credit report like credit cards car loans student loans and a house payment you are looking at a lot of debt and also looking at the possibly of paying a lot of money out of pocket each month even after the bill collectors has called you several times.
A typical consolidation means you stop making your payments and you begin making payments to a debt consolidating company instead. While the debt consolidating company does not physically pay your debt for you they will negotiate a settlement so that way they can collect enough money from you to settle on the balance. Typically 30-50% of the amount you owe to the creditor.
Yeah that can be a lot of money shaved off the balance yet who has the money to continue making payments to anyone let alone a debt consolidation company.
Credit repair can help you as far as getting your score on track however first you need to settle all of the balances on your debts before you can begin to build credit again.
When comparing debt consolidation to chapter 7 you are going to need to look at the risks it takes to put that blemish on your credit report along with other complication of getting a job etc.
A Chapter 7 can relieve you of many debts and it saves you a lot of money from having to consolidate your debt. The next best thing to a chapter 7 is going with a chapter 11 bankruptcy. A chapter 11 allows you to make monthly installment payments on the balances you owe while freezing interest and penalties as well as working out a smaller amount to pay to the creditors.
The chapter 7 is the most preferred however the other avenues may be considered if you have no other way to get out of your financial hardships.