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When you carry high balances on credit cards and loans, it can be difficult to think about anything other than your financial situation. A serious debt situation may make it challenging or even impossible to make ends meet each month. You may wonder how you will pay all of your bills, and this can keep you up night and cause you to lose focus during the day. If you are challenged by a serious debt situation in Philadelphia, you may be wondering if help is available for people in financial crisis like you. The good news is that Philadelphia debt relief is available. While there are several types of debt relief that you can consider using, debt settlement may be a top choice to consider.

The Legality of Debt Relief in Philadelphia

As you begin researching debt relief options in Philadelphia, you may hear about how others have been able to drastically lower their monthly debt payments and even eliminate debt balances through debt relief options. This can sound too good to be true, and you may be wondering if this is illegal. As you take a closer look at debt relief, you will discover that there are three common types of debt relief available to Pennsylvania residents. These include debt consolidation loans, debt negotiations and settlement and bankruptcy. There are significant variations between these options, and closer review may help you to determine if debt settlement is the right choice for you.

Causes of Financial Stress in Philadelphia

Philadelphia is a friendly town that you may love to call home, but you may easily feel alone in your struggle with debts. Everywhere around you, it may seem like people are spending money without a car in the world. You, on the other hand, may stress about every penny you spend. However, you are not alone in your financial challenges. The U.S. Census Bureau indicates that more than one in every four residents in this city lives below the poverty line. The average income level is approximately $22,919 per capita. With this in mind, it is clear that may who live above the poverty line also have very low income levels. The typical Philadelphia homeowner pays $1,239 per month as a mortgage payment, and the average renter pays $922 per month. Paying such a high housing payment with a low level of income can be burdensome, and many people find that they are unable to fully make their debt payments as a result.

What Is Debt Settlement, and How Can It Help?

If you are unfamiliar with what debt settlement is, you may be wondering how it works and how it can help you overcome your obstacles. Through debt settlement, consumers often will hire a debt negotiator to contact their creditors on their behalf. The negotiator will make a case to your creditors to lower your outstanding debt balances. There is no obligation for them to do so, but some may be motivated to write off a portion of the debt that you owe. If they agree to write off your debt, you may find that your monthly debt payments are significantly reduced, and this can help you to more easily make ends meet each month. In addition, because you will owe less money to creditors, you may be able to achieve a debt-free status much more quickly.

Who is an Ideal Candidate for Debt Settlement?

The ability to have lower payments and reduced outstanding balances simply by asking your creditors to make this happen can sound too good to be true. It can provide significant relief, and it may be a possibility that you can enjoy. However, debt settlement is not a solution for everyone who is suffering for debts. First, you should know that settlement can impact your credit rating. Because of this, most people who consider it already have a bad credit score. If your credit rating is good, you may opt to apply for a debt consolidation loan. A loan will not negatively impact your credit rating in the same way as settlement can. Second, your creditors generally will not be motivated to write off your debt unless you have already fallen behind on your payments. They often will write off debt when they feel as though they may not receive the full outstanding balance from you and that you may default on the debt entirely. With this in mind, if you are current on your payments and have no history of late payments, this may not be the right solution for you to consider.

Debt Relief Resources Available in Philadelphia

Because debt is such a serious and common issue with Philadelphia residents, there are several financial resources available for you to consider. For example, there are several reputable credit counseling agencies that you can turn to initially. A credit counselor can assist you with improving your budgeting and financial management efforts. He or she can also analyze your finances to determine which form of debt relief may be more beneficial to you.

Your debt balances can be incredibly high, and this can create high debt payments that prevent you from leading the life you want. You may be unable to enjoy vacations, to save for the future or even to make ends meet. If you can relate to this, now is the time to explore debt relief options in Philadelphia.