What are my Options to get out of Debt?

Continue to Pay Minimum

Paying the minimum payment on variable interest rate credit cards is a tough battle. To just maintain the balance without going deeper into debt, one must typcailly pay more than the minimum required payment. If you only make your minimum payments, it can take upwards of 25-35 years and thousands of dollars in interst to pay off the entire balance.  This is obviously the most expensive option that takes the longest amount of time to complete.

Home Refinance

With the downfall and uncertainty of today's housing market and depreciation in home values, consolidating unsecured debt into a secured mortgage debt can be a risky option. Also remember that you will be paying on the interest and debt for 15 to 30 years (or whatever loan length you elect). 

Refinancing is often a less desirable option, because people may get turned down or do not qualify based on income, time with current employer or have sufficient equity in their home. Between the up front appraisal fee, title fees, escrows fees (taxes and insurance) and origination fee-which could end up costing you thousands of dollars- you are not getting rid of your debt but only transferring it from your credit cards to your home, while losing home equity. If you hit a hardship and can't afford the new higher monthly mortgage payment you are now in risk of losing your home to foreclosure.

Consumer Credit Counseling

Debt Management Plans (DMPs) offered by CCCS programs can be an effective debt relief option for those that mostly need budgeting help and a decreased interest rate to pay off their debts in full.  DMPs generally involve lower amounts of debt than debt settlement programs may accept. While enrolled in a DMP, consumers generally do not receive creditor calls; however typical program lengths are around 5 years in duration. A consumer’s involvement in a DMP may also be reflected on their credit report.Consumer’s that choose CCCS programs generally do not have problems making continued payments on their credit cards, and simply need structure and a modest interest rate reduction. In comparison, debt settlement programs are generally for consumers that are experiencing a financial hardship and are designed to settle the entire outstanding balance for less than the consumer owes. 

Bankruptcy***

Chapter 7
Filing bankruptcy can me the best solution for some consumers.   Laws pased in 2005 made qualifying for bankruptcy more difficult, so if you’re considering bankruptcy, it’s important that you first schedule a consultation with a bankruptcy attorney to see if bankruptcy is even a viable option. 

Remember, a bankruptcy may stay on your credit for up to 10 years and is typically viewed as a last resort.

Chapter 13
This debt relief option typically involves filing for bankruptcy and seeking a plan that involves repaying all or a portion of your debt over a period of time- often  5  years. Like Chapter 7, a consumer must qualify for Chapter 13 bankruptcy and not everyone will qualify.

Consumers should consider such an option only by consulting with a licensed bankruptcy attorney.

Even if you cannot qualify for bankruptcy, you may be able to qualify for our debt settlement program.  To find out if you qualify for the ClearOne Advantage debt settlement program, call us at 1-888-785-5376 today!

***  ClearOne Advantage, LLC is not a law firm and cannot provide you with advice or counsel regarding bankruptcy.  To learn more about whether bankruptcy is the right option or to find out if you will qualify, you should speak to a licensed bankruptcy attorney in your area.