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The financial crisis made debt mount quickly for residents of Arkansas and the rest of the nation. There are loads of consumers who still have a lot of work ahead of them. We’d like to help. Listed below are the various debt relief approaches popular today. Research your options, then consult a debt specialist for a free evaluation.

Debt Consolidation in Arkansas

Suppose you had a single payment per month that included all your different credit card bills or other debts. Often times this involves a debt management plan accepted by your creditors and you, or a large loan that merely takes care of all your credit card or other debts. If you’d rather not take on a big new loan, a debt management plan might be the way to go. Don’t hesitate. Learn how much a debt consolidation company will save you.

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Arkansas Credit Counseling Agencies

Credit counseling generally entails a debt management plan, an arrangement between you and your creditors that your credit professional sets up. The advantages are considerable:

  • Home isn’t on the line.
  • Credit not damaged.
  • Cost-effective monthly payment.
  • No more harassment from credit card companies and collection agencies.

As you can see, credit counseling is not as high-risk as some debt relief methods, and it is normally very affordable at the same time. Generally people who could benefit from credit counseling have these characteristics:

  • Debts of at Least $3,000
  • Steady Income
  • Sincere Desire to Be Free From Debt

With credit counseling, you will pay back everything you owe to your credit card companies, plus interest, which is more beneficial for your FICO scores in the long term. As for the cost of credit counseling, Arkansas residents typically find that it’s the most cost-effective way to get out of debt. An important part of credit counseling is debt management. A debt management plan is a method of debt consolidation, in that the money you owe every month will be merged into one monthly sum. However, no loans are necessary. Each month, all you’ll have to is give a fixed amount to your Arkansas credit counseling firm. They allot the money among your creditors.

Settling Debt in Arkansas

So that they can negotiate a better settlement, your debt settlement company will probably have you quit making payments to your creditors. Your funds will be deposited into a savings account. Once there’s enough money to pay the negotiated amount, the money you owe will be paid off. Meanwhile, your credit score declines because you are not making your payments. In addition, the collections harassment may not end. In accordance with relatively recent FTC rules, your special purpose account should:

  • Be with an FDIC-insured bank.
  • Not penalize you for extracting funds.

Debt settlement isn’t rocket science, yet it’s best left to a professional. Debt settlement is the only debt option that lowers your original unsecured debt, rather than just your fees or interest rate. But it means placing your money into a savings account each month as opposed to paying off your credit card bills. When you have enough money saved, you send them the arranged sum. Needless to say, this will be detrimental to your credit ratings.

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Debt Settlement versus Consolidation

Settling your debts and consolidating them are two different solutions. While debt settlement results in a reduction in what you owe, management isn’t going to. When it comes to debt management, consolidation, or counseling, your payment per month is combined. However, continue paying back your creditors until your debts are paid in full. There is no doubt that this form of debt relief is easier on your FICO score, but reduced interest rates and fees are the only form of savings you’ll enjoy.

Debt Relief Arkansas

Arkansas Debt Profile

On the surface, Arkansas performs quite well when it comes to credit card debt. Out of all 50 states plus DC, they are ranked 44th with an average debt of $4535. That means only seven states have a lower average credit card debt per capita. However, this is dampened by the fact that the state’s average income is just $22,720–about $6000 below the national average.

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