Client Options: Choosing the Right Debt Solution

If you're struggling with debt, there are several options to consider. Some are more effective than others, so it’s important to understand the benefits and risks of each.

1. Do nothing – A Risky Choice

Ignoring your debt won't make it go away—in fact, it will only get worse. Interest and late fees will continue to pile up, making repayment even more difficult. Creditors are focused on profit, not your financial struggles, so waiting and hoping for a solution is not a realistic strategy.

2. Debt Consolidation Loans – Difficult to Qualify

Debt consolidation was once a common way to manage debt, but today, these loans are hard to obtain. Strict qualifications and high-interest rates (typically 10%-12%) make it challenging for many people to secure a consolidation loan, especially in today's economy.

3. Bankruptcy – A Last Resort

If you have no other way to resolve your debt, bankruptcy may be an option. It stops creditor harassment and collections but comes with serious long-term consequences.

There are two main types of bankruptcy:

• Chapter 7 – Eliminates most debts with no repayment required, but not everyone qualifies.
• Chapter 13 – Requires a 3-5 year repayment plan before remaining debt is forgiven.

Many creditors prefer to negotiate a settlement rather than see you file bankruptcy, since they may recover something instead of nothing.

4. Debt Settlement – A Smart Alternative

Debt settlement (also called debt negotiation) is an effective and bankruptcy-free way to resolve debt faster. This program helps you reduce what you owe and pay off debt in a shorter time frame than other methods.