The Debt Chef - Debt Reduction Program

Debt Reduction Program

If you're in debt, you need to get out. But doing it on your own can take forever. (Okay, not literally forever, but 13-30 years, depending on how much you owe.) To reduce the amount of time you're in debt, you really should consider a debt reduction program.

Lots of Options

Twenty-five years ago, the debt reduction industry was born. Prior to that, the only kind of debt help available was bankruptcy, which can do some serious damage to your credit report and make it difficult to get a house, a car or even a credit card! But the debt reduction industry gave consumers options--many options, in fact. These debt management programs are so effective at eradicating debt that Congress passed a law in 2005 requiring anyone who's filing for bankruptcy to go through a debt reduction program first.

Here are the five debt reduction programs. You'll notice that there's one for just about any situation:

Debt Settlement - This is a debt reduction program for people who have quite a bit of money saved up, just not enough to pay off all their debt. Through this program, a debt settlement company contacts all your creditors to get your balances reduced by 60-80%. If your creditors agree to this, they will want their money immediately. And since they'll report it to the credit reporting agencies and it will have a negative effect on your credit, this is the one program you might really have think about before enrolling.
Student Loan Debt Consolidation - This debt reduction program is for people with $10,000 or more in student loan debt. It combines all of your student loans, gives them one low interest rate and reduces your monthly payments by as much as 50%.
Debt Consolidation Loan - This debt reduction program is simply a loan given to you to pay off your unsecured debts all at one time. However, to qualify, you have to have collateral. The benefit is that the interest rate on the loan is so low that you can be out of debt in five years!
Debt Consolidation Mortgage - This debt reduction program is for homeowners. You borrow the amount of your unsecured debt from your mortgage company and that amount is added to your mortgage. So you're essentially paying off all your credit card debt at the same interest rate as your mortgage. Your mortgage payment does go up, but not by much because you pay the money back over the life of your mortgage.
Debt Consolidation - This is a debt reduction program for anyone, whether you qualify for the above-listed programs or not. What happens is a debt consolidation company contacts your creditors to get your balances and interest rates reduced by up to 57%. Then they combine all the new balances and you pay the debt consolidation company one monthly payment, which they distribute to your creditors. The end result is that your balance is paid off in five years.

What did we tell you? Did you believe us? When it comes to debt reduction programs, there truly is something for everyone!