If you find yourself feeling frustrated with the economy, you are not alone. A recent survey by Bankrate found that approximately two out of three adults in the United States are struggling with their financial situation. Of the listed concerns, the vast majority of survey respondents reported feeling stressed about paying for their daily needs. Paying the mortgage, paying for heat and water, paying for electricity and groceries … meeting these basic needs is causing strain in households throughout the country.
Those who are struggling to make ends meet, like the respondents in the survey noted above, can find navigating their debt to be overwhelming. In these situations, it is important to know that there are various legal pathways that can help alleviate financial burdens. Each offers unique benefits suited to different financial situations. Some examples include:
- Debt consolidation: This process involves combining multiple debts. This results in one debut which may have more favorable payoff terms such as a lower interest rate.
- Debt management plans: This focuses on negotiating with creditors to create a manageable repayment plan. Such plans often result in reduced interest rates and waived fees.
- Debt settlement: This involves negotiating with creditors to pay a lump sum that is less than the full amount owed. While potentially reducing debt load significantly, it can also negatively impact credit scores.
- Bankruptcy: Filing for bankruptcy may allow individuals to liquidate assets to pay off debts or create a repayment plan under the protection of the bankruptcy court. Bankruptcy can provide a fresh start but applicants should consider the potential impact to their credit before moving forward.
Navigating debt relief requires careful consideration and often, legal counsel. Each option carries significant financial implications and may affect one’s financial future. By understanding the risks and benefits of each option, individuals can choose the most appropriate path toward financial recovery for their specific situation.