One of the ways that many consumers attempt to increase their credit scores long term are through various types of debt management and elimination strategies. National Credit Solutions wants consumers to understand the differences between various programs and understand the benefits as well. There are essentially three forms of debt elimination available to consumers today, these are: (1) Debt Management Programs (DMP’s); (2) Debt Settlment Programs (also referred to as debt elimination programs; and (3) Bankruptcy.
About Debt Management Programs (DMP):
Debt management programs are essentially a means of insuring a consumer pays their bills on time and they also assist the consumer to pay less in interest and more to principal, a good strategy for paying off debt faster. In a DMP, a qualified credit counselor will negotiate with your creditors directly in an effort to reduce your monthly payments, mostly through APR reductions. The credit counselors will provide ongoing counseling to borrowers while they remain in the program to help them pay their debts on time, regularly.
About Debt Settlement Programs:
Debt Settlement, sometimes referred to as Debt Elimination, is much different from a DMP. Instead of a counselor negotiating with the creditors and motivating the consumer to pay their bills on time, debt settlement programs are mostly for clients that may have tried a DMP first or for those who simply cannot afford payments anymore. A debt settlement program does provide a great amount of debt relief, sometimes reducing balances by 50% or more, but it does not eliminate all debt.
Bankruptcy, for many consumers, is considered a last resort. American consumers can file either a chapter 7 or chapter 13 bankruptcy. The main difference between these is that in a chapter 7 bankruptcy, most debts are completely liquidated, meaning, the consumer does not have to repay the debt at all except for some forms of debt like student loans and other government debts such as back taxes. A chapter 13 bankruptcy is where the consumer and the courts co-determine a payment plan to pay off creditors long term. The court appoints a trustee and the consumer pays the trustee over s specific period of time. Debt balances in a chapter 13 filing can be reduced significantly and the consumer can save a lot of money utilizing this strategy,
If you have problems with debt and credit. call National Credit Solutions at 1-888-278-9118 toll free. Our credit analysts will be happy to refer you to a trusted debt management program, debt settlement program, or to a pre-screened, qualified attorney that practices bankruptcy law. Or, if you prefer, CONTACT US and request a free consultation.