Debt relief or debt consolidation -- which method to go for

Increasing numbers of people in Illinois are finding themselves in a situation of overwhelming debt. Debt relief means the forgiveness of either partial or total debt and comes in many forms. Just as there are various ways to achieve debt relief, there are also various alternatives to it. There are many different types of debt, and whether it is a mortgage, personal or business loans, credit cards or unpaid bills, any debt in excess can negatively affect a person's life.

The first step is to write up a financial plan, recording detail of all income as well as all costs and expenses. Then try and figure out a way to decrease current expenses in order to have extra funds for reducing the debt. One will also need to decide whether debt relief or debt consolidation is the best option, keeping in mind that many organizations offering help with debt management will require high payment for their services.

A debt relief counselor will communicate directly with a person's creditors and negotiate a reduced monthly payment for the account with each creditor. They will also require a percentage of the total debt as remuneration. Counselors for debt settlement and debt consolidation services offer to arrange a loan at reduced interest rates. The money obtained from the loan is then used to settle all the debt, leaving only the loan repayment to pay on a monthly basis. All of these services will expect to benefit from those in debt, however.

Illinois residents who are under stress because of their financial situation may also wish to research government grant programs for debt relief. The most important thing is to act, and to do something positive to eliminate debt as soon as possible. Ignoring the situation and hoping it will go away is the worst possible road to take. When the stipulations of debt counseling services are not appealing, or it seems as if there is no way out, one might wish to consider filing for bankruptcy. Doing so can provide total relief from debt, allowing a person to move forward without financial burden.

Source: Services Zone USA, Debt Consolidation And Debt Settlement -- Which Debt Relief Option Is More Effective For You?, Adam Couch, Oct. 29, 2013

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