Common Questions about Debt Relief for Unsecured Bills

What happens if I simply stop making my monthly payments?

Well, of course, you should call a debt relief agent at your earliest convenience to see how swiftly the budgetary problems could be resolved! Still, that's probably not the answer that you are looking for, and, more's the pity, a full explanation depends greatly upon a variety of divergent factors. Is the loan secured by collateral, for instance? In such cases, the lenders would have no choice but to reclaim whatever property has been offered up beforehand as a part of terms. For car or truck loans, this means the financial institutions holding the note would have no recourse beyond repossession of the vehicle, and, for home mortgages, under the most dreadful of all debt experiences, this could lead to forbearance or foreclosure measures that would seize hearth and home through legal action.

When it comes to credit card debt, the typical reaction of lenders after a succession of missed payments would be to send the loan to bill collectors more practiced in forcing restitution. Often, the collection agency has links to an attorney to lend additional weight to their threats of legal action should the borrowers continue to avoid satisfaction of funds owed. There exists a small but nonetheless worrisome chance that whoever end up as the creditor of record could go so far as to sue for a legal judgment in order to obtain the funds owed. If the judgment's approved by the courts, the lenders could go after your checking or savings accounts, garnish your salary, or even assess a lien against your personal residence. While these judgments occur far less frequent than the collection agents may suggest, it's still always better to try some debt relief maneuver rather than just hoping to avoid the worst consequences.

Does the same hold true for educational loans?

Well, the answer to that's going to partially depend upon the origins of the lending institution that first gave out the student loan. Was it a private finance company or a branch of the state or federal government? Student loans deriving from banks operate under the same basic principles as credit card debt accounts with one sizable difference: you won't be able to utilize Chapter 7 personal bankruptcy protection to eliminate the educational obligations. The United States Congress pushed this stipulation into the bankruptcy code around twenty years ago at the behest of the lending community, and, now, not only are scholars precluded from the fresh start granted other Americans, the absence of opportunities for bankruptcy could also invalidate the more effective methods of debt relief such as settlement negotiation.

For student loans arranged by the federal government, refusal to pay back the loans on time could result in far more dire repercussions. Indeed, it's not only possible but arguably common for the authorities to force the forfeiture of income tax refunds, claim up to fifteen percent of net wages, and theoretically even go after otherwise automatically assessed benefits such as disability assistance. Worse yet, the extraneous fees assessed for collections by the bureaucracy can pile up themselves, and states are forbidden from listing public or private student loans within the statute of limitation for commercial financial burdens. In other words, without some form of debt relief, your salary or benefits could be jeopardized by unpaid student loans even sixty or seventy years down the line.

The decision to reach out for help with your debt is not one that's easy to make. You were raised to "do the right thing", but now it's nearly unbearable. You struggle along while your creditors are turning up the heat. And now you're at the point where the late fees, penalties and interest expense make it impossible to keep your head above water.

Ask yourself this. If you could eliminate your debt without permanently damaging your credit, why wouldn't you?

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Debt Relief

Bankruptcy is not your only option! Our goal is to help you determine the right course of action for you to take. We will connect you with a debt settlement company today that will help you avoid filing for bankruptcy protection.

Are your finances spiraling out of control? Get the information you need today to stop harassing creditor's phone calls. Total Debt Relief provides a matching service to connect you with pre-screened Debt Settlement Professionals. These debt management pros will educate you on all of the options available to you to get out of debt. Total Debt Relief helps you make the most informed decision possible so that you can get your financial life back on track.