Choosing the Right Debt Payoff Planner For Your Needs
One of the most difficult financial decisions that a debtor may face is the decision on whether or not to use a debt payoff plan or file for bankruptcy. Bankruptcy can have many undesirable consequences, the biggest of which is that it creates more debt for the debtor than it removes. Unlike a debt payoff plan, filing for bankruptcy does not remove the debt. In fact, creditors are often more than happy to collect debts from debtors who file for bankruptcy. Therefore, it is important to consider all of the ramifications and risks before deciding if debt settlement or bankruptcy is the best option.
A debt payoff planner or professional financial adviser can be an invaluable resource in determining which debt settlement or bankruptcy is the best option for a particular individual. These individuals are not debt counselors, but rather help professionals determine which course of action will be best for a debt relief situation. Many advisors provide free financial counseling. Others charge a small fee for their services.
In order to obtain the most beneficial debt relief, a debt negotiator must be hired. There are two types of debt settlement negotiators; those that work for the debtor or on their own behalf, and those that work for the creditor. Some debt settlement companies also provide credit counseling as part of their service. These debt settlement companies will work with creditors to lower interest rates and eliminate other costs associated with debt. They will also negotiate the debt down to a manageable amount. This amount can often be paid in a lump sum or as installments.
Another type of debt payoff advisor is the credit counselor. Credit counselors are usually employed by debt management companies. These companies have been established to assist debtors in managing their finances. With a debt payoff counselor, the debt negotiator contacts all creditors to negotiate lower interest rates and a payment plan. A credit counselor will also educate the debtor on credit habits and how to avoid future debt. In most instances, credit counselors are paid by the debtor’s monthly fees.
A third type of professional debt relief advisor is a debt consolidation specialist. Debt consolidation specialists help the consumer in creating a debt consolidation plan. The consumer is given one monthly invoice that contains all of their unsecured debts. The specialist then works with creditors to reduce the total amount of debt owed. The consumer then makes one payment to the debt consolidation company, who in turn pays the creditors.
A fourth type of professional debt relief adviser is a debt settlement lawyer. Debt settlement lawyers help the debtor to negotiate a debt settlement. A debt settlement lawyer helps the debtor achieve the best debt settlement offer. Debt settlement lawyers will not charge an upfront fee. They charge a percentage of the debt amount once it has been negotiated.
All four debt settlement advisors mentioned in this article can be very useful. Each debt negotiator specializes in a certain aspect of the debt negotiation process. Consumers should be sure to select the advisor that is most qualified for their debt payoff needs. Consumers should also make sure to select advisors that are familiar with the specific aspects of their individual debt situation.
The most important thing a consumer should do prior to hiring any debt settlement advisor is research their credentials. It is important that they research at least three debt counselors. By doing this consumers can ensure they get the most favorable debt payoff option. By doing this consumers can avoid hiring the first debt consolidation, debt negotiation or debt settlement advisor they find.