Consumer Debt Relief Pain Scale Guide
Our consumer debt relief pain scale guide is intended to help you to improve your financial health. The consumer debt relief pain scale has five financial ranges: no pain | distressing pain | intense pain | horrible pain | terminal pain. Each scale is increasingly more serious, more complex and more difficult to resolve. An honest self review of your financial situation should help you quickly classify yourself on the debt relief pain scale. To move forward and improve your financial health is then a matter of following the guidelines. While easy to understand, it is not necessarily easy to accomplish.
Here is an overview of our consumer debt relief pain scale and options you should consider:
Debt Relief Pain Scale - Distressing
Consumer credit counseling (the other side of debt counseling) is a process by a neutral third-party to provide you information, guidance and support on budgeting, credit, money and debt management. The goal of consumer credit counseling is to help you improve your financial situation by avoiding excessive debt that you cannot comfortable maintain.
Consumer credit counseling is simple in principle. You borrowed money from creditors and now have debts that need to be serviced (paid back) on a consistent basis. Consumer credit counseling will explain how you got into your current financial state and what are the options available to get you to a better financial place. The goal is to help you eliminate your distressing financial pain long term.
Debt Relief Pain Scale - Intense
Consumer debt consolidation (often referred to as debt management) is a process of combining your unsecured debts into a single, larger debt (loan) with a more favorable interest rate, payment terms and lower monthly payment. Examples of unsecured debts that can be consolidated include credit cards, personal loans, medical bills and some types of student loans. The purpose of consumer debt consolidation is to improve your financial situation by lowering your TOTAL costs of financing your debts. This will help you reduce, not eliminate, your intense financial pain to a more manageable level.
Here are the basic things to know about consumer debt consolidation:
- Debt Consolidation Is A Refinanced Loan With Extended Repayment Terms
- Extended Repayment Terms Mean Longer In Debt
- A Lower Interest Rate Isn’t A Guarantee When Consolidating
- Debt Consolidation Is Not Debt Elimination
- Debt Consolidation May Increase Your Total Debt Obligations
A Consumer Debt Settlement option or debt adjustment is the process of resolving delinquent unsecured debt for far less than the amount owed by promising the lender a substantial lump sum as full payment.
While the process of negotiating with creditors can be done directly by the consumer (debtor), this service is normally performed by a third-party company due to the complexity of negotiation with creditors.
Debt settlement comes into play only with your unsecured credit like credit cards, medical bills and personal loans. A creditor is not going to negotiate and accept less than you owe if there’s a belief you could pay the debt originally agreed to.
This option will help those consumers with a financial hardship, that have little likelihood of repaying their creditors and should not be taken lightly. Over a period of time this will help you reduce your horrible financial pain to a more livable level.
Debt Relief Pain Scale -Terminal
The consumer debt relief bankruptcy option is regarded as the ultimate debt relief solution. This is chosen only when other debt relief alternatives are unable to eliminate the debts of a consumer. It is a legal process which promises a fresh financial start to the individual by eliminating their outstanding debts, with some exceptions. But it has serious consequences, including long-term damage to your credit profile.
Bankruptcy will severely damage your credit, so the decision to file for bankruptcy should not be taken lightly. Make sure to consult with an attorney experienced in Consumer Bankruptcy licensed in your jurisdiction before choosing this option.
Bankruptcy law exists to help people who have taken on an unmanageable amount of debt to make a fresh start. But it isn’t a simple process and doesn’t always lead to a happy ending. So before taking that very serious step, be sure to explore all your consumer debt relief alternatives. Similar to pulling out an infected tooth or cutting off a limb, you will eliminate your terminal financial pain, but there will be repercussions that you will carry the rest of your financial and personal life.
Conclusion - Consumer Debt Relief Pain Scale
Change is painful. Few people have the courage to seek out change. Most people won’t change until the pain of where they are exceeds the pain of change.
An overview of the consumer debt relief pain scale. This includes 1) Distressing Financial Pain – Consumer Debt Counseling Option; 2) Intense Financial Pain – Consumer Debt Consolidation Option; 3) Horrible Financial Pain – Consumer Debt Settlement Option; and 4) Terminal Financial Pain – Consumer Debt Bankruptcy Option.
Have a comment or question? We welcome your feedback, so just jot it below. And, if you know someone that might benefit from this article, please send it along via your favorite social media channel. For additional information on how to regain control of your financial situation, please Contact Us for a free, no obligation consultation.