Differences Between Types of Debt Relief
Problems with debt are on the rise throughout the nation, and while facing problems with debt can feel very lonely, it’s far more common than you may realize. There is a range of debt-relief options out there, but they are not all created equal. In fact, some providers are predatory in nature. Having a better understanding of what’s available can help you identify your best options, and our experienced Columbia bankruptcy attorneys at Reed Law Firm, P.A., can help.
Debt Management Plans
Debt-management plans (DMPs) are generally negotiated by nonprofit agencies that attempt to eliminate late fees and obtain lower interest rates from creditors. Under a DMP, you would make one payment to the involved agency, which would, in turn, distribute the money according to the terms negotiated on your behalf.
While a DMP comes with benefits like reducing your monthly payments and stopping the endless calls from creditors, it can take years to pay off the underlying debt. Additionally, not all creditors are interested in this form of negotiation.
Debt Consolidation
The idea behind debt consolidation is rolling several debts into one primary debt and making it more manageable in the process. Debt consolidation seeks better loan terms, and it can be a decent option if you have a steady income and a solid credit score that can land a reasonable interest rate. Again, however, debt consolidation doesn’t alter the amount of debt you’re responsible for, which is generally the primary concern.
Bankruptcy
Bankruptcy is a federal legal process that offers a fresh financial start and often discharges a considerable amount of debt. Bankruptcy is legally challenging, but the financial relief afforded can make a big difference in your financial future. South Carolina implements state-specific bankruptcy rules that guide the process, which makes it in your best interest to work closely with a respected local bankruptcy lawyer.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy discharges most unsecured debts, and it comes with all the following benefits:
- Unsecured debts can be wiped off your record in as few as four to six months.
- You can experience immediate financial relief that includes putting an end to harassing phone calls, wage garnishment, and lawsuits.
- Asset exemptions that relate to your homestead, vehicle, and personal property are allowed.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is considered a financial reorganization that is best suited to those who earn a regular income. The terms for Chapter 13 bankruptcy involve court-supervised payment plans of from three to five years.
Bankruptcy can afford considerable relief, which includes eliminating many of the related stressors. In fact, the benefits of paving the way toward a better financial future through a well-considered bankruptcy can be difficult to overstate.
Our Experienced Columbia Bankruptcy Lawyers Are on Your Side
Our seasoned bankruptcy attorneys at Reed Law Firm, P.A., are proud to serve clients in Columbia and throughout the area, and we have the legal skill and experience to help you resolve your case favorably. Learn more by contacting us online or giving our firm a call at 803-726-4888 today.
