June 20, 2018
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Unsecured Debt – Need Help?

Unsecured Debt
Unsecured debt is debt that is not tied to any item of property. If the debtor fails to pay, the creditor cannot take back the property or items. The only recourse is to sue and get a court ruling. Examples of unsecured debt are credit card bills, student loans, medical bills, and department store cards. By comparison, secured debt is backed by collateral to reduce the risk associated with lending, such as a mortgage or car loan.

Unsecured Debt – Need Help?

Money Matters
Are you drowning in debt or having difficulty paying your bills? A common response to those facing uncontrollable debt is to just get rid of it—any way possible. Desperation can set in. Sound familiar? Bankruptcy, debt settlement, or a debt consolidation loan can be tempting, but it’s important to know that these options, more often than not, leave consumers in more serious trouble than when they started.

Many Americans face tough financial challenges for a multitude of reasons—loss of employment, medical emergencies, lawsuits, divorce, or overspending, to name a few. Whatever the reason, it’s easy to reach for your credit cards. As the balances rise, the monthly payments rise and the interest rates often go up, making it more and more difficult to pay off. Late charges and other fees can also compound the credit problems.

Credit Counseling and Debt Managements Plans
The best, long lasting solution to a debt crisis—and to get out of debt for good—is a well-implemented and consistent debt management plan. Taking the first step to contact a nonprofit credit counseling organization is a step in the right direction. Waiting for debt collectors to call will only exacerbate the problem. Credit counselors can work with you to help solve your financial problems and pay down your debt. By organizing your bills and evaluating your income and expenses, a credit counselor can develop a personalized budget and repayment plan that can help you become debt free.

In a debt management plan, you deposit money each month with the credit counseling organization, which uses your deposits to pay your unsecured debts, according to a payment schedule the credit counselor develops with you and your creditors. If agreed upon, your creditors may reduce interest rates, lower monthly payments, waive late and over-limit fees, and even stop collection calls.

Committing to a debt management plan does take some determination and patience. Developing and retaining good money management skills can give you the financial security you and your family need.



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