Florida has continually encountered disasters like any other state in the world, and its debt levels have hiked over the years. While certain debts are payable within the set time, some are huge and increasingly burdening the borrowers who cannot afford to pay.
Besides leaving you with a negative score, the unpaid debts make it difficult for you to access future loans even after repayment.
You only need good debt management skills from a credit counseling consultant in Florida, and you’ll sail through the journey smoothly. However, if you find yourself stuck, here are tips on how to get a handle on debt in Florida.
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5 Ways to Tackle your Debt in Florida
There are several ways of accomplishing debt settlement in Florida, each of which has its advantages and disadvantages. Read on we see the best five you can use.
Make Minimum Monthly Payments
One of the options in getting a debt handle is making minimum monthly payments, which can be very expensive in the long term, especially when the interest rates are high. While it might feel easiest, it takes a long period to complete the repayment considering the installments and the debt balance.
Although consumers who make minimum monthly payments improve their credit score, they become profitable for the lenders due to their high interests.
Debt consolidation involves applying for a new loan that covers all the others. It is one of the smartest moves you can make in debt management.
While debt consolidation relieves your financial belt, you only qualify if your credit score is good and allows lower interests. This move is available on personal loans only because they have fixed interest rates, repayment periods, and monthly installments. You can learn more about debt consolidation options for Florida residents at Freedom Debt Relief.
A Debt Management Plan
A debt management plan, also known as credit counseling, is an inexpensive program offered by non-profit and government agencies in Florida to mediate on behalf of the debtor and creditor.
The agencies have debt experts who comb through your finances and advise you on the best way to make payments in recovering the loans. Most recommend depositing a certain sum of money to your preferred debt relief firm. They then distribute your money to the creditors and negotiate on your behalf for better interests.
Although you’ll eventually repay the loan, enrolling in a debt management agency gives you access to waivers and reduced interest on the initial loan. You also improve your credit score since you’ll not default.
Filing for Bankruptcy
In Florida, filing for bankruptcy while you cannot repay your debts is the last resort. While an official declaration of bankruptcy prevents the lenders from proceeding with the recovery process, it can also hurt your credit score in the future.
Some declarations might require you as the debtor to repay the loan in manageable installments; therefore, it’s wise to understand its cost implications before applying.
Debt negotiation is similar to debt consolidation, but for-profit organizations handle it. Once you get into an agreement, the firms negotiate with your lender to reduce the principal amount, making it easier for you to repay the loan.
After negotiation, debt settlement is faster, and the process is cheaper than debt consolidation. It’s worth noting that some measures the negotiating companies take might cost you more, especially when they take longer to agree with your lenders on the best terms.
Consequently, your repayment history becomes poor since you stop payment until they reach a consensus.
Are you caught up in multiple loans and wondering how to get a handle on debt in Florida? There are several options for solving this, and you only need one that best suits your financial plan.
In Florida, taking debts is a way of life, and you enjoy it more if you can manage them. However, to maintain access, you must protect your credit score, determined by several factors, including repayment pattern.