There are several options providing financial solutions from which to choose for solving debt problems. Debt Settlement, Credit Counseling, Debt Consolidation and Bankruptcy are the more common.

What is Debt Settlement ?  

Alternative solutions based on your financial capability.                           

Debt Settlement Programs have the greatest range of applications and are based solely on the financial capability of the debtor-providing an alternative to Bankruptcy. Our programs are flexible and can be modified to accommodate special creditor offerings, as well as changes in the debtor's income or expenses without disrupting the program. Those who qualify for debt settlement could be out of debt in as little as 1 to 5 years. These programs provide creditors with an alternative to costly civil litigation, which if successful for the creditor often drives the debtor into Bankruptcy-from which the creditor rarely recovers the debt-much less the cost of litigation.

A greater than 70% Failure rate

Credit Counseling programs were originally set up by charitable (non-profit) organizations to help people who were experiencing financial hardships. Creditors, after realizing that these organizations were helping some people get back on track financially, adopted a more formal program to contribute to their efforts. Not only do Credit Counseling Organizations essentially work for the creditors, and in many cases are actually owned by the creditor and set up as a “non-profit”,  they implement creditor models which a lot of times out-perform the financial capabilities of the client and subsequently have a greater than 70% failure rate. And yes, they do get paid - by you in the form of monthly contributions, and by the creditor under the "Fair Share Contribution" based on how much they get you to send in each month (usually 8-15% of what you send in). Not all creditors participate and pay under the "Fair Share Contribution" program, which means you will have to handle those creditor accounts left out of the program on your own.

Converting unsecured debt to secured debt

Debt Consolidation may provide a consumer with a home equity loan to help "consolidate" his or her outstanding debts into one monthly payment. While debt consolidation loans often offer consumers a lower overall interest rate, the negative effect is that many consumers often find themselves in a worse situation than before, and the only thing they've really done is convert unsecured debt into secured debt, jeopardizing their most valuable asset - their home. A creditor with an unsecured debt cannot force the sale of your home, but failing to pay the increased mortgage payment could result in the loss of that property. Statistics show that 60% of those who use equity from their homes to pay off unsecured debts find themselves in the same position within five years.

Only as a last Resort

Bankruptcy should only be considered as a last resort. Once filed, bankruptcy will remain on your record for 7-10 years and could affect your ability to get credit and/or better rates on some loans. Newly passed bankruptcy legislation will make it more difficult for debtors to file Chapter 7 and will require those debtors who don't qualify to restructure and repay under Chapter 13 their unsecured debts over five years. Even when a bankruptcy finally falls off the credit record it will continue to impact you for the rest of your life since most credit applications, job applications, etc. ask if you have ever filed bankruptcy.