No sane person would want to be caught in tangles with debt. Unfortunately, though, stumbling upon debt at one time or another is part and parcel of the dynamics of living. If, however, you are indebted but is a wise consumer, then there’s no need to fret over this truth because, by now, you can weigh all available debt elimination options to find one that best suits your situation.

Here are some debt elimination options you may consider:

• Do nothing. Why worry about a debt when you can pay it off over time at whatever rate of interest your creditor entails you to pay? If you only read the fine prints carefully, you might find that creditors can alter interest rates at their discretion.

•  Go to Consumer Credit Counseling. Credit companies offer this option to lower the interest rates for up to nine months. With this debt elimination option, you pay one amount for all your credit cards to a CCC company and they will distribute a monthly payment to your creditors on your behalf. In effect, your intermediary largely affects your credit rating for up to three years

 

• Chapter 7 Bankruptcy. This debt elimination option entails a liquidation proceeding wherein all debts are eliminated completely. A debtor turns over non-exempt property to a bankruptcy trustee who converts it to cash for distribution to creditors. Chapter 7 Bankruptcy stains your credit report for ten years and during such time you’ll be paying the highest possible interest on all your purchases.

 

• Chapter 13 Bankruptcy. This is a debt repayment plan wherein debtors subtract debt payment from their projected future income over a period of from three to five years. The consumer gets to keep all his property if he is religious in his monthly payments for three to five years. It stays on the credit report for seven years. Sad to say, 80% of applicants of a 5-year program fall out of it before completion. Thus, debts are not eliminated, the bad marks stay on your credit report and you pay more for everything you buy for the next 7 years.
• Debt settlement. Negotiate your debt with your creditor for 40% to 60% of what you owe in a period of 12 to 48 months. Your credit rating might fall once you’re in the program, but then you’re debt-free and your credit is rebuilt by the end of the program.

There are a variety of debt elimination options you can choose from. The essence here is to pick the one that suits your situation and stick to it—religiously.

 

Note: 

what debt elimination options are there to consider