Debt is easy to get into, but very difficult to get out of. This is because it is easy to accumulate large amounts of debt without even really being conscious of it. But once consumers are confronted by the severity of their financial situation, they often make rash decisions and choose the wrong debt resolution. Getting out of debt requires research, and a well thought out plan. There are many debt help myths that deceive consumers, so here are the critical facts about debt help.
Myth: “The only way to get out of debt is the traditional way–slowly paying it off”. Many people think that the best way to eliminate debt is to just follow a strict budget and struggle to make the payments over the course of years. But if you are struggling or can no longer make the payments on your bills now, there is no way that you can get out of debt the ‘traditional’ way. Even for people who can make the monthly payments, it can take ten to twenty years to become debt free using this method, making it a good idea to research debt resolutions that offer faster debt relief.
Myth: “Because you don’t have to pay the debt back, bankruptcy is the ultimate solution to debt.” Bankruptcy may eliminate debt quicker than just paying off the loan over the course of many years, but it surely isn’t the right debt help option for everyone. Consumers often declare bankruptcy without doing the research, and they aren’t aware of the consequences it can have. Chapter 7 and Chapter 13 are the two types of bankruptcy. Chapter seven resolves unsecured debts; chapter thirteen includes a short term repayment plan. It is important to know that filing for bankruptcy is stressful and can be expensive. Bankruptcy can also damage your credit score and stay as a negative item on your report for up to ten years.
Myth: “Debt Settlement companies are really just illegal scams.” Some people think that debt settlement is illegal, but the truth is that debt settlement is both a legal and effective way to become debt free. Unfortunately, some debt settlement companies are illegitimate and scam consumers, which has led to the belief that debt settlement in general is illegal.
Myth: “Debt consolidation loans offer significant debt relief”. Debt consolidation, although a popular debt help option, isn’t the best one for people who need real debt relief. This is because debt consolidation loans combine unsecured debts and make paying off your debt easier, but they don’t necessarily reduce or help eliminate the debt.
Myth: “Debt Settlement ruins your credit.” Not paying your bills and accumulating debt is what ruins your credit. Some debt help options may cause further damage to your credit score. But because debt settlement is the fastest way to eliminate debt, it is the least likely to do damage to your credit history. Debt settlement can allow you to become debt free quickly, and start rebuilding your credit.