When looking for debt relief, it is important to do some research to figure out which of the several options is optimal for your situation. The Internet is a great source, but always be sure to check the credibility of a particular article or website. Here is a brief overview of the major debt relief options and whom they work best for.

Debt Consolidation Loan

In a debt consolidation loan, you use one loan to pay off various other loans or lines of credit. This loan will generally have a lower interest rate, as well as a lower monthly payment. The payment you make to this loan is distributed amongst your creditors. The most common type is a home equity loan, or second mortgage, in which your home is used as collateral. A debt consolidation loan takes several years to pay off, and you pay the entirety of your debts, plus interest. This debt solution works best for people who still have relatively good credit, resulting in a lower interest rate on this loan, and have substantial equity in their home. It is best for people who are only trying to get out of debt, not overhaul their financial habits.

Consumer Credit Counseling Services (CCCS)

In consumer credit counseling services, you have new and hopefully expert eyes take a look at your debt situation to offer advice and solutions. They provide different strategies for debt solutions, and take your entire financial situation into account, rather than just your debt. While they work with creditors to reduce your monthly payments, you still pay the full amount of your debt, and credit counseling also has a negative impact on your credit rating. Keep in mind that CCCS was originally established by credit card companies to help track down people who were not paying their creditors. CCCS works best for people with less than $10,000 in debt and have verified they are working with a reputable company.

Bankruptcy

Filing bankruptcy should definitely be a last resort. The two types of bankruptcy applicable to consumers are chapter 7 and chapter 13. In chapter 7 bankruptcy, your assets are liquidated and your debts are eliminated in one quick move. Only people with low income, few assets, and a demonstrated inability to pay their debts once their basic needs are covered, quality for chapter 7. In chapter 13 bankruptcy, you set up a program through a trustee in which you pay a portion of your debts in a plan that works for you. Chapter 13 bankruptcy is best for people with high income who are facing foreclosure or tax problems. Although bankruptcy seems like a quick and easy fix for debt, keep in mind that it remains on your credit record for 7 to 10 years

Debt Settlement

In Colorado debt settlement, you take a lump sum of money, or make high monthly payments into a trust account until you have a lump sum of money, which is then used by the firm or company you are employing to negotiate with creditors. You pay a portion of what you owe and are absolved of your debts. Although it affects your credit score negatively, most debt settlement programs are completed in less than two years, meaning you are shortly able to rebuild and recover your credit. Debt settlement works best for people with $10,000 or more in unsecured debt who have a lump sum of money ready to use, or who can make high payments into an account. It also works best for people who are willing to make a commitment to long term financial change.

“Trident helped me settle my debt without incident.  Their professionalism was outstanding and helped me get through a time of stress.  I was very surprised how much money they were able to save me.  I would recommend them to anyone looking for help getting out of debt! “   Chris T.

Lionel M. came in with $35,200 of credit card debt.  He was able to give us a lump sum to settle with.  We settled those debts, including our fees, for $22,200, saving him $13,000.

Lawrence A. had $71,000 of credit card debt.  He also had a lump sum to settle with.  We negotiated those debts, including our fees for $44,000, saving him more than $26,000.

Susan F. has $50,000 of credit card debt.  She does not have a lump sum debt settlement payment but is able to make a monthly payment of $2000.  (The monthly payment she makes is 4% of her total debt, and this is the amount we require for monthly installment clients.).  With this 4% payment, we can have her out of debt in less than 18 months.

Dave R. wanted to refinance his home to pay off credit cards at a lower, tax-deductible interest rate, but was denied by the bank.  The bank said his FICO score was too low.  Further complicating the issue, most mortgage companies only lend 80% of the home’s value.  In his case, he could only pull out $18,000, where he had $30,000 in debt with 2 credit cards.  We were able to refer him to a mortgage company who could get him qualified and charged a fair rate of interest.  With the $18,000 he pulled out of his equity, we settled the $30,000 of debt he had.

Lastly, we offer a bankruptcy referral resource.  If you need a bankruptcy attorney in any state.

When you find yourself in debt and struggling to make ends meet, it can seem   overwhelming.  Trident Debt Solutions is here to help you through these difficult financial situations and provides a free, no obligation consultation.  Even if we cannot help you, we will reply with your best option.  For your protection, we do not ask for account numbers or your social security number.  We never harass- but if you are concerned, you may request a reply by email only.