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What Legal Options are Available for Debt Relief? 3 Methods and Consultation

Did you know that the average American household has an average debt of $137,063? If you are part of the debt statistic and are trying to get out of the debt trap but are struggling, you are in the right place. We are going to cover the legal option that are available to you.

Keep reading to learn more about debt collection laws.

1. Bankruptcy

Bankruptcy is one of your legal options available for debt relief. You have two different options if you go this route. There is the option of filing a Chapter 7 bankruptcy to eliminate all of your debt or you can file a Chapter 13 bankruptcy that allows you to rearrange your debt to pay over a certain amount of time.

Both Chapters have their own pros and cons. It is best to talk to an experienced attorney in the world of bankruptcy to make an informed decision for your specific situation.

2. Negotiate

Every creditor is a bit different but you might be able to work something out with them if you call and explain your financial situation. Maybe you can get some relief when you negotiate with them directly.

In some cases, you might be able to temporarily suspend payments via a loan modification or through a forbearance. When it comes to credit card debt you can work something out where they lower your payments each month or your interest rates after negotiating and coming to an agreement with your credit card lender.

You will be surprised that some credit card companies will be willing to help you rather than not get paid at all. Even if it is not an ideal situation for them to lose out on some money they would rather lose a little bit than all of it.

3. Refinancing

If you are struggling to make ends meet and are worried about losing your home because you can’t afford to pay your mortgage then you might be able to refinance. You can contact your current mortgage lender to see if they have an option to refinance or you can go through a new lender. Take the time to see what interest rates companies are offering you to refinance and go for the lowest one.

You can also refinance auto loans if you are worried about losing your vehicle. With a car refinance you can also go through a new lender or the current lender. The goal is to choose a refinance loan that will be more affordable monthly and with a lower interest rate.

Which of These Legal Options Will You Choose?

If you are drowning in debt we hope that one of these legal options will help you out during these rough times. Do not make a rash decision, always check what the impact on your credit score will be before making a final decision.
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