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Today in Colorado, the average consumer has a balance of $5625 on their credit cards–the second-highest in the nation. In some cases, professional guidance is required. Standard approaches include

  • Consolidation.
  • Management.
  • Settlement.

Determine which should be on your list, then contact a debt professional for a debt analysis.

Colorado Debt Consolidation

Let’s say you had just one single monthly payment that covered all your various credit card bills and other debts. Most of the time, this entails getting a loan that pays off your other debts, often with a more affordable monthly payment and improved terms. However, there are possible risks involved, as home equity loans or HELOCs are approved against your home. Oftentimes, debt management is the best option, rather than a loan, as no collateral is at risk. To see which type meets your needs, you need to talk with a qualified debt consolidation specialist.

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Colorado Credit Counseling

Credit counseling, also known as debt management, involves working together with a certified specialist. You pay back your debts in their entirety, but without harassment from collections. In terms of your credit, this is far better than settling a debt, and it doesn’t call for a major loan. Your credit counseling consultant may help you:

  • Merge Your Monthly Payment
  • Secure Less Expensive Rates
  • Reduce Calls From Collection Agencies
  • Put Together a Strategy for Repaying Your Debt

An important part of credit counseling is debt management. Why consider a DMP? Because you might benefit from:

  • More Affordable Interest Rates
  • Decreased Collector Telephone Calls
  • One Monthly Payment
  • Swifter Freedom From Debt

You don’t have to speak to your creditors; the credit counselor will manage this end of things.

Colorado Debt Settlement and Negotiation

So as to leverage a better settlement, your debt settlement agency will probably have you quit paying back your credit card companies. Your money will go into a bank account. After you have enough money to pay the negotiated amount, along with the fee owed to your debt settlement firm, the money you owe will be paid off. For the time being, your credit score worsens because you’re no longer making your payments. Additionally, the debt collector messages might not get any better. Creditors are aware that borrowers who are behind on their payments are in danger of bankruptcy, and in that case they will get absolutely nothing. First off, your debt settlement company will begin discussions with your lenders on your behalf. If a settlement is approved, you will be required to pay the sum if you have the money ready, or open a bank account for saving money to pay back the creditor. Typically, it is best if you can repay the balance as soon as possible.

Debt Consolidation vs Settlement

A lot of people mistake credit card settlement and consumer credit counseling, debt management, or debt consolidation. They’re completely distinct solutions. Debt settlement programs involve a reduction in what you owe, while consolidation or management doesn’t. These forms of debt relief – for instance consolidation, management, counseling – have much less of a negative effect on your FICO score over the long haul. However, they are long term options that require you to pay all of what you owe.

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