There are 5 ways to get rid of debt and lead a stress-free life. But what’s important is that you choose the one that works for you.

1. Interest rate arbitration: This is where you choose an independent third party to negotiate low interest rates with your creditors. So, you can consolidate multiple bills with one low monthly payment. This is also known as loan consolidation. The benefits are:

• Pay less each month
• One monthly payment instead of many
• Credit score improves

2. Debt management: This is where you work with a debt solutions company to help you pay off your debts and create a budget. The benefits are:

• Interest is reduced
• Late fees may be waived off
• Manage multiple bills with ease

3. Debt settlement: This is where you have a settlement company/law firm working with your creditors to lower your payoff amount by 40-60%. With settlement, you have 2 major benefits:

• Creditors reduce interest
• They cut your principal balance

4. Chapter 13 bankruptcy: Chapter 13 is a court monitored debt repayment plan. The benefits are:

• Creditors reduce interest on your debt
• They trim the principal debt balance
• You don’t use your assets to pay off debt

5. Chapter 7 bankruptcy: This is where you hand over your assets to a court-appointed trustee who sells them off and uses the sale proceeds to pay off your debts. With Chapter 7 bankruptcy, you get the following benefits:

• Interest on your debt is lowered
• Principal balance is reduced

However, your credit score takes a hit and it’ll take quite a few years till you actually rebuild your score.

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