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The recession increased deb loads all across the state of Louisiana, and a whole lot of families are still feeling the effects. The road to being debt free may not be the easiest, but there are professionals who can guide you along the way. Below we review three of the most popular approaches to debt relief being used today: consolidation, counseling/management, and settlement.

Debt Consolidation in Louisiana

It’s estimated that one in ten Louisiana consumers can only afford their minimum credit card payment each month. Are you one of them? No need to panic. Debt consolidation can help. It can be used to describe at least two entirely different forms of consolidating debt:

  1. Consolidating your debt into a DMP (Debt Management Plan).
  2. Consolidating debt with a new loan.

The latter strategy is most common, but it generally means securing a home equity loan. This requires that you own your home (and have equity in it), have decent credit, and it means you are shifting from unsecured to secured debt. On the other hand, a loan of this kind will come with much lower rates than you’re currently paying on your credit cards, and you will have only one payment to make each month. Debt management, on the other hand, is closely tied to credit counseling, discussed below.

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Credit Counseling in Louisiana

Credit counseling is in many ways superior to a consolidation loan or settlement:

  • Loan approval not required.
  • Credit kept intact.
  • Affordable monthly payment.
  • Protected against creditors and debt collectors.

Given these advantages, credit counseling isn’t as high-risk as some debt relief approaches, and it’s typically extremely budget friendly as well. By signing up with a credit counseling company, you may be able to:

  • Merge Your Monthly Payments
  • Benefit from Cheaper Credit Card APR
  • Eliminate Calls From Collection Agencies
  • Pay Off Your Debt More Quickly

Do you have more than $10,000 in debt or have monthly payments related to rent, loans, or credit cards that consume more than one half of what you make each month? You might need to enter a DMP, or debt management program. A debt management plan is a form of debt consolidation, because your payments to creditors is merged into just one sum. However, no loans are involved. Every month, all you’ll have to is deliver an agreed amount to your credit counseling company. They post the correct percentages to your creditors.

Debt Settlement in Louisiana

It’s best for your credit to pay back your entire debt, but as a last measure you can get the creditor to agree to a smaller amount.

Debt negotiation is not extremely complex, yet it’s best left to a specialist. How can you tell if debt settlement is a good option?

  • Have you been looking into going bankrupt?
  • Are you carrying at least $10,000 in debt?
  • Are you comfortable with a bad credit score if it’s necessary to get out of debt?

If you meet these criteria, you’re not alone.  A great many consumers in the boot-shaped state owe this much.

Comparing Debt Consolidation to Debt Settlement

Settling your debts and consolidating them are two different methods. Debt settlement leads to a reduction in what you owe, whereas consolidation or management doesn’t. You pay back your creditors month after month as part of a debt management plan, so your credit rating isn’t impacted nearly as drastically as it will be after debt negotiations. Then again, debt management normally takes more time and ultimately you’re going to pay off your debt in full.

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