What Are My Options for Debt Relief?

According to a recent poll, about 46% of U.S. households reported facing serious financial problems due to the coronavirus pandemic. Life can throw you a number of different financial curveballs that can prevent you from paying bills or meeting other various financial obligations. When experiencing financial challenges, there are a number of options available to achieve debt relief, including debt consolidation, debt settlement, and filing for bankruptcy. However, determining the right debt relief option for your unique situation can be difficult without the help of an experienced Colorado debt relief attorney for proper guidance.

At Garcia & Gonzales, P.C., our attorneys are dedicated to providing reliable legal guidance to individuals and businesses struggling through financial hardships. As your legal counsel, we will review your unique circumstances, help you explore all possible debt-relief options, and determine the right option that best fits your unique needs. 

Our attorneys will work diligently to guide you through every phase of the legal process as you attempt to navigate key decisions and work toward a favorable resolution for your financial struggles. Our firm is proud to serve clients across Westminster, Denver, Aurora, and Boulder, Colorado, so call or reach out today to schedule a one-on-one consultation.

Choosing Debt Consolidation

Debt consolidation can be described as the process of combining several loans, credit card debts, liabilities, and other bills into a singular form of debt. It involves taking out a new loan to repay your debts. Debt consolidation is usually taken by individuals who are overwhelmed with a number of huge high-interest debts. The pros and cons of debt consolidation are as follows:

Pros

  • Taking out a debt consolidation loan can help you repay your debts sooner. Thus, you will pay a reduced level of interest overall.
  • Debt consolidation helps streamline your finances and eliminates the need to worry about multiple payments and due dates.
  • Consumers can get a lower interest rate with a debt consolidation loan.
  • Debt consolidation loans have a fixed repayment schedule.
  • A debt consolidation loan can help improve your credit score over time.

Cons     

  • Debt consolidation won't solve your financial problems. There is no guarantee that you won't face financial hardship or sink further into debt.
  • Debt consolidation loans often come with upfront fees and costs.
  • A debt consolidation loan may feature a higher interest rate than your current payment.
  • You may be unable to access loans with lower interest rates due to your credit score.

Choosing Debt Settlement

Debt settlement, also known as debt adjustment, is a practice that allows a debtor to resolve or settle delinquent debts for less than the amount owed by negotiating a substantial lump-sum payment. Here, a debt settlement company will offer to contact your creditors and negotiate a reduced amount on your behalf. Settling your debt for less than the amount owed may sound great at first. However, debt adjustment involves different risks and can affect your credit score potentially. The pros and cons of this debt relief option are as follows:

Pros

  • Debt settlement helps reduce the amount of debt you will pay.
  • It can help you avoid filing for bankruptcy.
  • It can get debt collectors and creditors off your back.

Cons

  • Debt settlement companies charge high fees that go directly into the company's pocket.
  • It can negatively affect your credit score.
  • The debt settlement company can hold your funds for several months or years without any progress with your case.
  • Your creditors may refuse to negotiate.
  • You could potentially end up with more debts in the form of late fees or interest.
  • There can be tax consequences.

Choosing to File
for Bankruptcy

Bankruptcy is a tool designed to help individuals and businesses who are overwhelmed with debt to get immediate relief. When experiencing financial distress, filing for bankruptcy may be your best option to remedy your financial situation and achieve the clean financial slate that you deserve. The pros and cons of choosing to file for bankruptcy are as follows:

Pros

  • Eliminates some of your general unsecured debts, including credit card debts and medical bills. Some qualifying debts may also be discharged after your case.
  • Alleviate your financial obligations.
  • Stop an eviction, repossession, or foreclosure on your home
  • Activate an "automatic stay" on your debts, which prevents creditors from harassing you, garnishing your wages, or collecting payments.
  • Helps rebuild your credit gradually. You can start re-establishing your creditworthiness once your bankruptcy successfully closes.

Cons

  • Filing for bankruptcy affects your credit score initially.
  • Bankruptcy remains on your credit report for 7 to 10 years.
  • Qualifying for future loans will become more difficult after filing for bankruptcy due to your credit history.
  • Filing for bankruptcy does not relieve you of child support and spousal support payment obligations.

Receive Reliable Guidance from Garcia and Gonzales

When struggling with debt, there are bankruptcy and non-bankruptcy options available to help remedy your financial situation. Understanding the benefits and risks of all of your options is important to better understand your situation so you can make informed decisions about how to move forward. If you have questions about your debt-relief options, it is important that you speak with an experienced debt relief attorney to explore your options and help you decide which option best suits your needs.

At Garcia & Gonzales, P.C., we have the experience and resources needed to help individuals who are overwhelmed with debt find relief. As your legal counsel, we can evaluate your financial situation, explore all possible debt-relief options, and determine the best solution for your unique situation. We will also fight to protect your legal rights, handle creditor harassment, and negotiate with creditors to create a reasonable arrangement that works for you.

Here at Garcia & Gonzales, P.C., our attorneys can offer you the detailed guidance and advocacy you need as we guide you through the entire legal process. We will help you make informed financial decisions, educate you on how to better manage your finances, and help you avoid potential pitfalls in the future. Our top priority is to work with you to establish effective strategies that will improve your financial situation and help you rebuild your credit score.

So if you or someone you know is struggling with debt, contact Garcia & Gonzales, P.C. today to schedule a one-on-one consultation with our experienced debt relief attorneys. Our team can walk you through your options and help you devise a plan to work toward financial security. We proudly serve clients across Westminster, Denver, Aurora, and Boulder, Colorado, so call or reach out today to schedule a consultation.


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