Debt can be challenging to overcome, making you feel like you’re not in control of your life. When looking to pay off debt, you might be considering different options.

If you’re confused about what to choose between credit counseling, debt settlement, and bankruptcy, it’s time to understand what they are. Keep reading to find out more about these three solutions and which one is most ideal for your situation:

Credit Counseling

Similar to what it sounds like, credit counseling involves educating an individual on sound financial planning and various debt management plans. It can provide debt management help as credit counselors may talk to your creditors and negotiate lower interest rates.

Counselors can also help in bringing past-due accounts current with creditors, depending on your individual situation. However, this option will require you to report all your unsecured debts to the counseling services you’re working with. You may be required to shut off all your credit cards and stick to catered payment plans. Once you determine a plan, you pay your counselor, who distributes the payment to the concerned creditors.

Debt Settlement

When dealing with unmanageable debt, you need to take a drastic step. Debt settlement is ideal when dealing with a high amount of debt. It involves negotiating with unsecured creditors about paying less than you owe but considering the payment fulfilled.

Working with a debt relief company can expedite the process, or you can choose to do it yourself. You should keep in mind that creditors to that you pay less than the full amount will usually report that to credit bureaus. It can impact your credit rating but is better than skipping payments altogether.

Declaring Bankruptcy

Bankruptcy is usually the last-ditch option when trying to pay off debt. Instead of paying off the debt, it focuses on ensuring that debtors are protected from creditors seeking payments. Depending on the extent of your debt, you might need to file for Chapter 7 or Chapter 13.

In Chapter 7 bankruptcy, you will lose some assets and capital that the court deems adequate to fulfill your debt requirements. The court decides the entire process, so you don’t have much say. In Chapter 13, you can make monthly payments into a plan that pays off your debts. Regarding timing, Chapter 13 can take longer to resolve than Chapter 7.

What’s The Best Option?

The severity of your debt can determine which option you ultimately end up settling for. If you don’t have a lot of debt, declaring bankruptcy can harm your credit score and complicate things. Filing for bankruptcy can remain on your credit report for more than five years, so you must consider it before deciding.

Finding the right experts to help you manage your debt can also make the choice clearer for you.

Looking to Manage Your Debt Efficiently? We’re Here to Help

If you feel like you’re struggling with your debt with no way out, Reliant Management Solutions is here to help. Our experts have more than two decades of experience in resolving debt and creating personalized plans for you. Our primary goal is always to ensure your financial stability and peace of mind.

Contact us at 407-789-1447 to see how you can manage your debt successfully.