Debt Consolidation Loans
If you are a resident of Nevada struggling with debts across multiple credit cards and other forms of unsecured debt, you may be considering a debt consolidation loan as a way to pay off your debts. If so, you're certainly not alone. Nevada residents, as well as individuals and families across America, are overwhelmed with credit card debt due to any number of reasons, such as unemployment, medical bills, or personal hardships. Fortunately, help is available. Many consumers have experienced relief from unsecured debts thanks to a variety of debt relief options, including debt consolidation loans, debt management plans coordinated by credit counselors, debt settlement or debt negotiation, and even bankruptcy.
If you are struggling with credit cards and other unsecured debts, find out how a debt relief plan may be able to help you resolve debts faster and save money. Get a free debt relief evaluation and savings estimate.
How Debt Consolidation Loans Work
In the case of debt consolidation loans, the goal is to combine or "consolidate" multiple high interest rate debts into a single, lower interest rate loan. In theory, the consumer takes the proceeds from the consolidation loan and pays off high interest credit cards, then only has a single lower interest rate debt consolidation loan to payoff. This makes perfect sense and debt consolidation loans have certainly been able to help consumers.
However, it's important to understand that for some individuals, it may not be wise to take "unsecured" debt such as credit cards and convert that debt into a new loan that is "secured" by a home or other asset. Why? Because if consumers hit a rough spot financially and fail to live up to the terms of their debt consolidation loan, they could be putting their home or other asset at risk. In addition, many consumers who take out debt consolidation loans do indeed pay off their credit cards, but then end up accumulating a whole new batch of credit card charges. Now, there's the responsibility to payoff a debt consolidation loan AND a new round of credit card charges. In this scenario, which unfortunately is all too common, the debt crisis has gone from bad to worse.
If you're exploring a debt consolidation loan, first take a moment to find out how a structured debt relief plan may be able to help you resolve debts faster and save money, without taking on more debt in the form of a loan. Get your free debt relief evaluation and savings estimate.
How Debt Management Plans Save Money and Help Resolve Debts
Debt management is a popular option among many consumers who are seeking relief from high interest credit card debts as well as other unsecured debts such as utilities, department store charges, gas cards, or even medical or doctor bills. With debt management plans or DMPs, the goal is to combine multiple debts into a single, more manageable, and more predictable payment plan made to a credit counseling agency, who then distributes the monthly payments to creditors month after month until debts are completely resolved.
With a debt consolidation or credit counseling program, one of the first steps is for the debt counselors to conduct interviews with consumers to learn how much total unsecured debt the consumer has, how much money the consumer can afford each month to pay down debts, then contact creditors one by one and request that the creditors accept proposals and agree to extend the benefits of debt relief to consumers who are experiencing a financial hardship. These benefits can include lower interest rates, a waiving of late fees and penalties, and even monthly payments they can more easily afford. When the consumer commits to stop taking on new new credit card charges and begins to pay down debts month after month on time, at lower interest rates, the process of debt resolution can become quite predictable, even exciting, for consumers who finally begin to see light at the end of the tunnel as the principal amount of their debt begins to shrink.
The bottom line: While debt management plans do not remove or erase debts at the blink of an eye, they can be very effective and save a substantial amount of money if followed faithfully. Overall, they are an honorable way for consumers to resolve debts and fulfill their financial obligations as promised.
If you are considering debt consolidation or a debt management plan via a credit or debt relief counselor, take a moment to find out how debt plans may be able to help you resolve debts faster and save money. Get your free debt relief evaluation and savings estimate.
State Financial Assistance
While debt relief programs help many individuals and families during times of financial crisis, there are certainly people going through a genuine hardship that may require a helping hand from the state to help them pay for utility bills, grocery bills, or childcare. To assist with their needs, the state offers such programs like Nevada Check Up (SCHIP), Nevada Energy Assistance Program, and the Head Start program, among others. To learn more about these services designed for low-income families and individuals, head to the state's homepage Benefits section.
How Debt Settlement or Debt Negotiation Works
Another increasingly common debt relief option is debt settlement, also known as debt negotiation. With the assistance of a debt negotiator, a consumer's goal in entering into a debt settlement program is to request their individual creditors agree to "settle" debts for much less than the actual amount owed. Debt settlement typically involves the process whereby consumers in distress stop paying high interest credit card minimums and instead redirect those funds and begin to "set aside" funds that can later be used to extend a debt settlement offer, through a debt negotiator, to a credit card company.
It's important to be aware that debt settlement, while popular as an alternative to personal bankruptcy, is an aggressive debt relief option that is not without its drawbacks: Consumers should realize that when they stop paying cards according to the terms of their agreements, creditors have the right to threaten, or take, legal action. In addition, money saved by settling for less is subject to taxation. Finally, debt settlement will likely have a negative impact on personal credit, but not as serious or long lasting of an impact as personal bankruptcy, which requires pre-qualification and is generally considered the debt relief option of last resort.
If you are struggling with credit cards and other unsecured debts, learn more about your debt relief options and get a free debt relief analysis and savings estimate at no obligation.