Having your debts negotiated by the experts at Alpha Debt Settlement is not your only options for debt relief when it comes to managing what you owe. Before you make the very important decision of how to best build a brighter future, we think it’s best that you review some of the benefits and risks associated with each of your options for debt relief.

CREDIT COUNSELING

Credit counseling will assist you in managing your debt through budgeting tools and education programs. A credit counseling agency will assist with placing you in a Debt Management Plan, and distribute payments to your creditors on your behalf.

You can consider this the equivalent of getting an education on properly managing your finances, while your counselor’s make sure you do not fall further behind on your current debts.

Benefits

  • Consolidates payment
  • Can lower interest rate

Risks

  • Does not reduce debt
  • Loss of credit cards

DEBT CONSOLIDATION

Debt consolidation is the practice paying down many of your debts with a new loan at a lower interest rate. In order to qualify for a consolidation loan, a higher borrower credit score and collateral is generally require. This is because debt consolidation lenders are taking on considerable risk by lending to those who are already in financial straits.

Benefits

  • Single monthly payment
  • May lower interest rate
  • Reduced credit impact

Risks

  • Does not reduce debt
  • Credit/collateral requirement
  • Not great for large debts

DEBT SETTLEMENT

Debt Settlement is our specialty, but our most important job is working for you. When you enroll in a Debt Settlement program you will determine an amount that you can afford, and place monthly deposits into a trust account. As the amount in the trust account grows, your Debt Specialist will negotiate settlements with your creditors on your behalf. One by one your debts will be settled for less than the amounts owed, until you are debt free.

It is important to note, however, that not all debts qualify and you should speak with a qualified Debt Specialist to determine if Debt Settlement is the right option for you.

Benefits

  • Affordable monthly payment
  • Significant long-term savings
  • Faster than minimum payment

Risks

  • Some accounts may not qualify
  • Must be in financial hardship
  • Creditor lawsuits and calls

BANKRUPTCY

Bankruptcy is the most extreme and damaging of debt relief strategies, but sometimes necessary. Through United States bankruptcy laws, you are essentially able to “start over” by declaring that you are no longer able to repay your debts. While this does almost immediately absolve you of the entire amounts of most forms of consumer debt, it has serious and damaging effects to your credit worthiness for 7 years after your declaration.

Benefits

  • Fastest strategy available
  • Limits creditor actions
  • Most debts can be discharged

Risks

  • Long-lasting credit damage
  • Loss of credit cards
  • Liquidation of assets

MINIMUM PAYMENTS

Minimum payments might be the most exercised option by debtors, but can only be recommended as a temporary solution. The amount of time and interest it will take to pay off your debts via minimum payments is never advisable. If you find yourself regularly only able to make the minimum payments, you should seek out another debt relief strategy as soon as possible.

Benefits

  • No creditor calls
  • Lower credit impact
  • No late fees

Risks

  • Long payoff time
  • High interest payments
  • No loan value reduction