Let's look at this further.
The first step, as I mentioned, is coming up with a solid debt elimination plan. Here are the top two plans that we recommend and an explanation of each one.
Part 1: Choosing A Solid, Proven 100% Debt Elimination Plan
Using Debt Negotiation:
A good debt negotiation/reduction company can negotiate with your creditors to settle your debts for as low as 50 cents on the dollar (and sometimes less). In other words, if you have debts that total $15,000, a good debt negotiator could save you around $7,500.
How does this work exactly and how much will this type of debt elimination cost you?
Once a debt negotiator agrees to take you on as a client you will stop paying your creditors completely while he/she negotiates on your behalf to reach a settlement with your creditors. In the mean time you will make payments into a bank account that you control to start building up a sum of money that you can use to settle your debts once a negotiated settlement is reached.
Warning. This type of debt elimination program will make your credit rating about as bad as it can get without going into bankruptcy. Once you stop paying your creditors, your credit rating will suffer.
On the other hand, if your credit rating is already quiet poor, this is probably not a concern. This type of 100% debt elimination program is an honorable alternative to bankruptcy and can save you not only thousands of dollars in debt but also clear up you debts within a couple of years.
Which means you get your life back in order as quickly as possible.
So how much will this cost you?
With this type of 100% debt elimination program, some professionals will require an upfront fee and ongoing fees while they negotiate on your behalf. My suggestion is to avoid these companies like the plague!
What you should demand is payment for performance. In other words, the debt reduction company only gets paid when they settle your debts. In this type of arrangement the debt reduction specialist typically gets a percentage of the amount that they save you.
One company that we often recommend to our visitors will actually provide you with a free, no-obligation, no credit check, custom debt reduction plan through their website. They will explain to you your options based on your situation and, if you like, begin working with you right away to get your finances back on track. Visit them here if you are interested.
For example, if they are successful in reducing your debts by $5,000, a typical fee would be 25% of that or $1,250. In other words, the more they save you the more money they make. This way both parties benefit from a better settlement which works in your favor.
Of course, once a settlement has been reached you still need to come up with the money to settle your debts. Here are a couple of ways to do this.
Once you stop paying your creditors under this 100% debt elimination plan, you are required to make monthly payments into a bank account which you control. The idea is that you build up enough money in this account over the time that the debt reduction professional is negotiating your debt settlements. Settlements do not typically take place right away, which gives you some time to build up some cash in this account.
Another option for homeowners is to take out a home equity loan to come up with the cash to make the settlement.
Did you know that even if you have little or no equity in your home you can still qualify for a loan using your home as collateral?
Did you know that even if you have poor credit, you can still qualify for a home loan?
If you do own your own home these are things to consider.
100% Debt Elimination Using Non Profit Credit Counseling/Debt Consolidation
Another 100% debt elimination plan that you can consider is non-profit credit counseling (often called debt counseling, debt consolidation, debt management etc.)
What happens with this 100% debt elimination plan is this.
A professional debt counselor consolidates all of your debts so that each month you make one payment just to them. They in turn pay your creditors.
Now this is not all they do of course.
The first thing they will do for you is contact your creditors and negotiate much lower interest rates on all of your debt. Usually, a good debt consolidator can reduce your interest charges by as much as 50%, sometimes as high as 100%. With the interest charges on your debt wiped, every dollar of your payments would now be going to pay down your debts.
Can you imagine how quickly your debt would begin to shrink if this were the case?
If you are looking for a trustworthy and reliable credit counseling/debt consolidation, then this is where you can find the company that we recommend to our visitors. They are a non profit organization that will not only help you get out of debt, they will teach you how to stay out of debt in the future.
For a more detailed discussion of debt counseling programs click here (debt elimination services)
Part 2: Executing Your 100% Debt Elimination Plan
This part is actually easier than you might think. If you choose either of the above 100% debt elimination plans, you will be working with a professional in the debt elimination field. Someone who understands your situation and deals with people every day who have similar problems. You are not alone in this!
These professionals will help lay out your plan and help you execute it. They are also a valuable resource to help you make sure that your habits change and that you do not end up in this situation again.