Of all the problems possible in a marriage, finances cause the most marital discord. Many singles consider finances to be their most worrisome issue. Many times this is due to a heavy debt burden. Several options exist to help people get debt relief from their unsecured debts. (Unsecured debt is not linked with a physical asset. Therefore, credit cards and medical bills are unsecured debts; a car loan or a mortgage are secured debts.) One option for debt relief is bankruptcy. While unsecured debts are indeed discharged, the long-lasting black mark on your credit report (up to ten years) makes bankruptcy less than ideal as a form of debt relief. Further, changing bankruptcy laws will make it more difficult to file. Bankruptcy should only be a last resort. It is not a quick fix. Another option is debt consolidation. Debt consolidation combines your existing loans into one loan. While this does away with late fees and over-the-limit fees, very little is done to reduce the amount of debt or to renegotiate interest rates. Further, this uses something as collateral, such as your house. If you still have trouble paying, you could lose your house to foreclosure. A third option of debt relief is debt settlement. The debt settlement company negotiates with credit card companies to agree to settle for a lesser amount owed, often pennies on the dollar, of both the interest and the principle. A debt settlement company also acts as the middleman between the debtor and the credit card companies, eliminating phone calls that border on harassment. A downside to debt settlement is that many debt settlement companies advise you to stop paying your monthly bills altogether in order to force credit card companies into settlement. While this may work for some credit cards, others may be just as likely to take you to court for non-payment, and debt settlement companies take no responsibility for such action. A fourth option for debt relief is through credit counseling services. This is similar to debt consolidation in that you pay only one bill to the counseling service. They in turn take over all your debt payments. The benefit of this is that any communication with the creditors is handled by the counseling service. The downside is that credit counseling services work primarily for the credit card companies. While they may work for a reduction of interest, they probably won't work for a reduction of principle. No matter which option you choose for debt relief, all are better than doing nothing and falling further and further behind. Check out all your options before making a decision. |
