Green Path Solutions Debt Relief Options

As long as you are able to make minimum monthly payments you may feel you’re doing the right thing by continuing on that same path. But this just may be your worst strategy.

Credit counseling is a debt management program in which you make a single monthly payment to a credit counseling agency. In turn, that agency distributes the money to your creditors on your behalf, ideally at lower interest rates so you can pay off the debt faster.

With debt consolidation you take out a larger, low-interest loan and use that money to pay off your higher-interest unsecured loans. This leaves you making a single monthly payment that is – in theory – lower than what you were paying for all of your credit card and other unsecured loans.

Debt settlement differs from the first two options in that the actual principal balance you owe is negotiated downward. Because you end up owing less, debt settlement is generally a faster and less expensive debt relief option than either debt counseling or debt consolidation.

For the individual who cannot meet his or her debt obligations, bankruptcy may be inevitable. A formal declaration of bankruptcy stops the creditor collection process, and the debtor no longer owes some or all of the unsecured debt.