How To Make Settling Your Debts Stress Free
Monday, March 24, 2014, 1:00 AM | Leave Comment
Acquiring large amounts of debt can cause immense financial hardship and emotional stress. The media and culture makes it seem that people cannot settle their debts without an immense investment of time, energy, and money. However, the truth is that most people can settle their debts stress free.
Here are strategies many people with debt can try to eliminate their debt.
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Know If Its Secured Versus Unsecured
Its important to know what type of debt one owes. The key divide between debts are secured and unsecured debts.
Unsecured debts are debts that one can easily be settled between the debtor and the creditor.
Secured debts are debts attached to an asset. The most common example is a mortgage, which is attached to a home or property. As a result of a mortgage debt, the credit may ask for the home or property as repayment.
Knowing the difference between these two forms of debt can help the debtor understand what kind of settlement they may need to work toward with the creditor.
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Research Terms of the Debt
Reading the fine print on the debt owed can be very helpful for the debtor. With this information, the debtor can navigate the terms and regulations that apply to their specific debts, like medical bills or credit card debt.
In addition, this information is helpful for over-zealous debt collectors who think they can collect debts that are already paid.
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Analyze One’s Wealth and Ways to Add More Revenue
With debt collectors calling or bills everywhere, it may make the debtor’s head spin. However, calming down, analyzing how much money and assets the debtor has, and seeing how they can use that to help pay down debts will provide a rational moment and strategy for the debtor.
In addition, the debtor may realize a reason for the debts is income. Even in this economy, there are ways to increase the revenue the debtor has to help pay down debts.
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Work With a Credit Counselor
Before negotiating one-on-one with the creditor, its a good idea to seek the advice of a credit counselor. These counselors know the ins-and-outs of all forms of debt and can have good strategies to alleviate debt without hurting one’s credit.
For example, credit counselors often recommend debt management plans with the creditor that helps the debtor pay back the creditor with payments that appreciate the debtor’s financial hardships.
This is often a better strategy than working on a debt settlement, which is a lump sum payment by the debtor to the creditor that is less than the debtor owes. This can seriously impact the debtor’s credit score.
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Civil Litigation
Civil litigation is the right of the creditor to bring a person to court over their debts. As a civil lawsuit, if a debtor does not reply to the lawsuit, then the creditor automatically wins.
Although a lawsuit seems scary, the civil litigation provides a legal resource for the debtor to negotiate a fairer, legally-binding debt-paying process to the creditor.
Working with a civil litigation attorney or family law attorneys like Richard Palmer Family Law Attorney, can help the debtor legally negotiate their credit card debts, child and spousal support debts, medical bills, mortgage, and Chapter 7 and 13 bankruptcy proceedings.
Its important to know to that the debtor has the legal right to bring up civil litigation against their creditor. Even if the creditor brings up a lawsuit, being legally savvy and protected by an attorney can help mitigate the lawsuit.
Although debts are uncomfortable, having a level-head and analyzing the debts with the help of counselors and an attorney can help to eliminate these debts.
One may find that they can pay down their debtors better once they review their finances and assets. Others may find routes through the contracts they have with their creditor.
Finally, if litigation is necessary, do not be afraid; it is possible to come out with a good debt management plan that is legally-binding for both the debtor and creditor.
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