Southeast Montgomery is home to over 355,000 Texas residents. Each household brings in about $67,500 annually, which is about $12,500 more than the 2015 national average. The current poverty level of the city is 12.8 percent, with about 4 percent of residents being unemployed. Although the income level is high, many residents are still finding themselves in debt way over their heads.
Understanding Debt Relief
If you are currently behind on your bills, it’s time to look into debt relief. This type of financial assistance comes in many different forms, but all aim at helping individuals get out of debt. The different types of debt relief include debt management, debt consolidation, and debt settlement. The ideal route to take will depend on an individual’s credit history and the amount of outstanding debt they possess. Let’s take a closer look at what these debt relief types are all about.
This is also sometimes referred to as debt negotiation. This management can be done by a debt specialist company or by the borrower alone. Debt management is done by negotiating with your current creditors to decrease your interest rate and/or your monthly payment amount. The idea is to get the prices decreased enough that you can comfortably make your payment each month on time.
There are many benefits to this method, which include:
- Decreased Interest Rate and/or Monthly Payment
- Stop Deliquency On Account
- Avoid Bankruptcy or More Bad Credit Marks
- Relief Of Stress From Outstanding Debt
This is another method to deal with debt when you’re unable to make negotiations work. Debt consolidation starts by totaling up all your current debt, then taking out a consolidation loan to cover that amount. Once you’re approved for the loan you will use the money to pay off all your outstanding debts.
The remaining debt you have will just be the consolidation loan itself. You will be responsible for paying a certain amount each month on the consolidation loan.
The benefits of debt consolidation include:
- Stop Delinquent Accounts
- Simplify Repayment With One Amount and One Monthly Due Date
- Releases The Financial Burden Of Outstanding Debts
- Fresh Start For Your Financial Mindset
If you didn’t have success with any of the two methods listed above, then debt settlement is a great next step to take. Debt settlement works by having a settlement agency contact your creditors to settle the amount of debt you owe for less. This process does take a while to work as the settlement agency and your creditors go back and forth negotiating a settlement amount.
This method is achieved by having the borrower fund a monthly escrow account. As the account grows in size the settlement agency will contact creditors to settle the outstanding debt for a lump sum amount. Since the agency will be offering lump sum payoff amounts, their settlement negotiation with creditors won’t typically start until you’re a few months into funding the escrow account.
For example, if the agency is trying to settle your $5,000 credit card bill for $3,000, you need to have that $3,000 in the escrow account. Also, it’s important to realize that while you are funding the escrow account your creditors are not being paid. This will result in delinquency notes on your credit history with the creditor.
The benefits of debt settlement include:
- Settle Your Debt For Less Than You Owe
- Financial Experts Do The Negotiation
- You Only Pay One Account Per Month
Who Qualifies For Debt Relief?
Anyone that is unable to pay their monthly bills qualifies for some form of debt relief. If you are just a month or two behind on your bills, a debt management plan can get you back on track. If you are multiple payments behind on your debts, a debt settlement or consolidation loan may be a better choice.
In most cases, those who are going through a financial hardship are going to be able to settle their debts for less as compared to those who aren’t. These hardships include many things such as divorce, the death of a spouse, or loss of a job.
Debt Relief Consumer Laws
As a consumer, you are entitled to certain rights when it comes to the debts that you owe. The Federal Debt Collection Practices Act outlines many of these rights and illustrates the laws by which debt collectors must practice.
In addition to the federal laws, the Texas Government has enacted their own laws to more specifically deal with debt collection and management firms. The regulation of debt management services can be found in Title 7, Part 5, Chapter 88. Consumer protection rights can be found in Title 5, Chapters 392 and 394.
Debt Relief Services In Southeast Montgomery
There are debt relief services available to local residents to help control their debt. Some of these include A+ Credit Repair and American Finasco. If you are an individual or business owner you can contact either of these firms to get the necessary help you need to live a more financially sound life.