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When You Should Seek Help to Get Out of Debt

When You Should Seek Help to Get Out of Debt

Used car salesmen get a bad rap, but that doesn’t mean you can avoid purchasing another vehicle your whole life. After all, used car salesmen provide a useful service when you need something to drive at a lower price point. The same thing’s true for debt relief services. If you’re in over your head financially, you may not know how to find reputable debt relief services. We’re taught not to discuss money or even ask for help to get out of debt, but why is that? Many people hoping to get out of debt would benefit from going through an experienced debt relief service or company.

If you suspect you might need professional help, getting expert guidance can speed the process up and cost you less. Finding someone who’s trustworthy can help transform your financial situation and put you on a solid path towards debt-free living.

Let’s take a look at some bankruptcy benefits that can help you start moving forward after discharging all that debt.

Most Americans Struggle to Get Out of Debt

First, there’s no reason to feel ashamed about needing help to get out of debt. Being in debt — even significantly so — is not particularly unusual for Americans, especially after the financial crisis of 2008. The Federal Reserve says credit card debt and auto loans rose above the $1 trillion mark this year. Plus, over 43 million borrowers brought outstanding student-loan debt up to $1.4 trillion at the end of 2017’s second quarter. Each student loan holder now owes $37,172, on average.

Why are these numbers so high? Well, as the Pew Research Center explains, household wealth fell 28% from 2001-2013, but the cost of living keeps on steadily rising. Simple math puts many Americans in financial trouble simply trying to manage their money.

As a result, debt consolidation, debt resolution/settlement services, and credit counseling are a fact of life. It helps to learn when these options may be right for you.

Situations That Call for Consulting a Professional Before You Can Get Out of Debt

Let’s review a few examples where you should seek professional help to get out of debt using a relief company or service.

1. Your monthly minimum payments only cover interest, not any principal on the amount you owe.

In this situation, you’ll never resolve your debt without drastically changing something. It’s time for you to figure out a plan to get out of debt that fits within your current budget. Many people who find themselves in this scenario consult with a debt relief specialist to learn about alternative repayment options.

According to the Federal Reserve’s latest report, 11.2% of student loan borrowers were more than 90 days delinquent in June. However, the report also notes that many student loans are currently in deferment, grace periods or forbearance. In reality, the Federal Reserve estimates about twice that many (roughly 22.5%) are “seriously delinquent.” However, a debt relief specialist can counsel you on your best course of action for handling delinquent student loan payments.

2. You have significantly more unsecured debt than available financial assets.

Unsecured debt includes credit cards, medical bills, or personal loans that aren’t tied to your financial assets, known as “collateral.” A debt relief specialist can walk you through various repayment options, including discharging unsecured loans through bankruptcy.

3. You’ve had a sudden life change.

Widowhood, divorce, or both household earners becoming unexpectedly unemployed can drastically impact your income. But it isn’t just drastic life changes that make someone a good candidate for debt relief services. In fact, if you owe more than $10,000 in unsecured debt, now is a good time to seek professional help. A local debt relief expert can help you sign up for assistance programs that could potentially reduce your monthly bills. One such program is the federal low-interest mortgage refinancing option for homeowners. Unless you talk to someone about options to get out of debt faster, learning about these programs can be difficult.

4. Student loans comprise most of your debt, so bankruptcy alone cannot help you.

Since you cannot discharge these loans through bankruptcy, there’s no clear-cut path for you to quickly get out of debt. The good news is, debt incurred through a mortgage or for educational purposes is often considered “good” by credit companies. However, you may feel overwhelmed from high monthly payments, particularly if you’re under-employed or supporting dependents.

Good News for Homeowners Struggling to Pay Down Student Loans

Recent Fannie Mae lending rule changes may help some homeowners with burdensome student loan debt. Even if this change doesn’t affect you personally, you may still benefit from:

  • Debt consolidation services
  • Creating a debt management plan
  • Debt settlement through a third-party negotiator

Benefits That Come From Professional Debt Relief Services

There are definite benefits from using a professional service, including:

  • Avoiding bankruptcy
  • Reducing your total outstanding debt amount
  • Less day-to-day financial stress
  • Repaying what you owe much faster (e.g., in less than five years instead of decades)

As with any financial decision, we recommend researching your options thoroughly before committing to any debt relief plan or service.

Ready to speak with a proven expert and learn the best way for you to get out of debt faster? Take this brief online survey now to get a personalized debt relief solution that’s designed exclusively for you.

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