With the end of the recession seemingly no where in sight, there are millions of Americans looking for debt consolidation information with the increase in demand for debt consolidation and debt relief, there has been a growth with supply within these types of services, conversely this doe’s not equate to a better overall service.

It is therefore in the consumer’s interest to gather as much information and filter out what is and isn’t relevant to them and the factual from the mediocre.

Young Families looking to become debt free can be in a vulnerable position and can be coerced into making a hasty decision based on the severity of their personal financial situation.

Look at all your options; first thing the consumer should take into consideration, is that they do have options they may be financially painful options but nonetheless one can start by a process of elimination to narrow down the field of choices that is open to them.

Bankruptcy

This option is usually a last resort there are several bankruptcy codes that consumers may file under the most commonly used are chapter 7, 11 and 13.

If you have no means of paying your creditors and your income is below the means tested threshold level then you may have to file for bankruptcy under chapter 7. Chapter 7 Bankruptcy will stay on a credit profile for 10 years and will have an adverse effect on a person’s ability to obtain credit in the future.

Chapter 11 is for business which individuals will require legal representation and chapter 13.

Chapter 13 is advantages in many ways and allows consumers that have a regular income to rearrange payments under a court approved payment plan, it also allows individuals to keep their assets and save their home from foreclosure. A chapter 13 Bankruptcy will have a less negative impact on credit rating than a chapter 7.

Do it yourself Debt Relief

Doing it yourself may seem the easiest and least costly way to become debt free, however in many instances this may not be the case, as the out come is dependent on numerous factors such as the amount of debt, the state you live in and the whether your creditors will want to negotiate with you.

If you are finding it difficult to pay for credit card debt, you can call your credit card company and negotiate a modified repayment plan, if your unsecured or credit card debt becomes delinquent these debts are usually passed on to a debt collection agency and you will have to negotiate with them to settle the outstanding amount.

NonProfit Debt Settlement

Many people assume that nonprofit debt settlement companies are free, this is not the case, non profit credit counselling was the first introduced model for helping people get out of debt these in 1951The National Foundation for Credit Counseling, or NFCC companies were given special exemption from paying taxes by IRS under clause 501(C)(3), There will be cost incurred these come in the form of donations small monthly fees from the debtor to the company for the handling of the administration of the debt and a portion will go to the creditor depending on the debt amount and applicable state laws.

The primary distinction between nonprofit and for profit is that the nonprofit company counsels the debtor on managing their debt and finances while the debt is reimbursed back to the creditors in a repayment plan which has a less negative impact on credit worthiness. There were some nonprofit companies who did not comply within the IRS tax guidelines and have had their credit counsellors licences revoked, some of these companies have re emerged under the for profit status.

For Profit Debt Settlement

Due to the high demand in the debt services industry in the last few decades there has been an increase in companies for profits sector to accommodate this situation, this is partly due to the rise of charge offs for credit card debt.

The services that debt settlement companies offer have diversified and developed over time into various programs which include Debt Consolidation, IRS Tax Debt Relief, Business Debt Relief, Debt Settlement and Debt Management as well as home loan modification and student loan modification.

These plans vary in numerous ways and the purpose to is to enable people to come to a negotiated settlement to pay in part if not all the debt, the settlements reached may also include reduced interest payments and cancellation of late payment fees. However credit rating will be affected on the type of debt repayment plan selected.

For more on Debt consolidation, Bankruptcy, Alternatives to Bankruptcy and Credit History go to.

Isabelle Martin Debt Consolidators

Isabelle Martin http://www.debt-consolidators.net/index.html

Author Bio: Isabelle Martin Debt Consolidators

Category: Finances
Keywords: debt consolidation, debt relief, debt settlement, credit card debt, debt consolidation information