What is the fastest method of debt relief?

What is the fasted method for getting out of debt? Well in this article I am going to answer that question and list a few of the debt relief methods ranging from the slowest way out to the fastest, excluding chapter 7 bankruptcy. 

By far the slowest thing that can be done to get out of debt is to only make minimum payments.  This isn’t a way to get out of debt, you can typically expect to pay back over four times the balance owed and can be in debt for up to 30 years.  People in this situation are running on what’s called the credit treadmill.  The treadmill in this case doesn’t help burn fat, but instead burns your hard earned dollars. 

Moving up the ladder brings us to credit counseling.  Credit counseling does cut the time you are in debt down by quite a lot when compared to minimum payments.  The reason for this is when on a credit counseling program you make a fixed payment instead of a minimum payment, and that fixed payment is for the duration of the program.  Plus most credit counseling programs can get the interest payments lowered which helps out greatly.  Typically credit counseling can take anywhere from 3-6 years, depending on how much debt you have and how much money you make.

Next we move onto chapter 13 bankruptcy. Which is very different than a chapter 7, which absolves you of all the debt that you owe.  Chapter 13 is a court ordered repayment process, which can be pretty nasty to tell you the truth.  The court pretty much takes control of your income by going over your financials and then determining how much they think you can pay.  This process typically  takes about as long as a credit counseling program, the difference being the amount you payback.  Credit counseling is a full repayment of the debt, where chapter 13 is not.

Which brings us to the fastest method of debt relief, which is debt settlement.  This is a process of where you or a company you hire negotiates with the creditors to reduce on the balance owed.  The reduction in balance can range anywhere from 40% up 75% of what is owed.  Thus making the time until your out of debt come much sooner, seeing as you are not paying the full amount owed.  Settlements can be reached usually within six months of going into default with the account you are looking to settle on.  However most people usually enroll with a company where they set aside a set amount of money each month to build up enough money to settle.  People who are qualified for settlement usually take around two years to complete the process and be debt free.

Here come the obvious one.  By and far the fastest method of debt relief is to somehow come into a lump sum of money and pay off all your debts at once and be debt free.  The only problem with this is that for about 99% of people in debt this isn’t much of a reality.  A word of advice for the people in debt that are considering using a company for either credit counseling or debt settlement is to do their diligence on the company first.  Make sure the credit counseling company or the debt settlement company are reputable and will do the correct job for you.  A place to start is to check the BBB or to check your state’s attorney general.  The attorney general in most states will list the companies under investigation and if you see the company you are looking at under investigation then stay far away.