If you have debt problems then determining the best course of action for paying off your debts can be tricky. There are several options for repaying debt, which option you choose will have to be determined by your specific situation.
One option to repay your debts is to pay on your own. This requires that you put together your own repayment plan based on your debt amount and your income and then create a repayment schedule that you can stick to. This can be extremely difficult to accomplish and requires a good deal of work. Consumer credit counseling services can help debtors create a specific repayment plan known as a debt management plan. In many cases these services can help get your interest rates and monthly payments reduced. With counseling you will not be able use any credit cards until all of your debts have been repaid.
Debt Consolidation and Debt Settlement
Debt consolidation typically means to consolidate all of your debts and then take out a separate debt consolidation loan to pay it off through single monthly payments. This is similar to a credit counseling service, but you must have decent enough credit to get a debt consolidation loan. A debt settlement firm can negotiate on your behalf with your creditors and possibly reduce your total amount owed by up to 60%. In order to use a debt settlement firm you have to already be behind on your repayments and your creditors have to accept the settlement offer.
For many people bankruptcy represents the best way to repay their debts. Chapter 7 bankruptcy allows debtors who have passed a means test and proven that they cannot afford to repay their debts partial or complete relief from their unsecured debts. Most Minneapolis bankruptcy lawyers will recommend this option for people with useful assets to give up as part of repayment. Chapter 7 will not eliminate student loan, tax or child support debts. Chapter 13 bankruptcy allows the debtor to keep some of their assets while repaying their debts in less than 5 years. The debtor still has to pay alimony, child support, wages, taxes and regular home and car payments while making their debt repayments.
If you are considering filing for bankruptcy or are interested in the best way to repay your debts, there are many MN bankruptcy lawyers that can assist. Bankruptcy lawyers can be found at: 6465 Wayzata Blvd., Suite 780, Minneapolis, MN 55426, or by calling (952) 294-0144.