Overwhelming unsecured debt is something that affects millions of people. If you are struggling with overwhelming unsecured debt, then you should know that you are not alone.

Fortunately, you and the other millions of people have a wide variety of options for taking care of your obligations.

The following are three ways to handle and pay off unsecured debt:

Debt Consolidation

debt-consolidation

A debt consolidation may be appropriate if your financial situation is disorganized. A debt consolidation is a process that allows you to combine all of your outstanding accounts into one low monthly payment. You can perform a debt consolidation by applying for a consolidation loan. The lender will consider your credit score and make a decision based on that. If you qualify for the advance, the lender will issue you enough money to pay off all your creditors. You can then pay the consolidation firm. Many debtors use this method to organize bills and save money. Consolidation loans usually have lower interest rates than other products.

Debt Management Program

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A debt management program is similar to a debt consolidation except it does not involve a loan. Instead, a debt repair company negotiates with all your creditors and tries to persuade them to eliminate fees and penalties. Once this person gets the creditors to drop your payments down as much as possible, he or she comes up with a monthly fee that you can afford. The fee includes monthly payments to all creditors and the monthly feed to the debt repair company. Each month, your counselor or representative makes payments to all your creditors on your behalf.

Individual Voluntary Arrangement

individual-voluntary-arrangement

An individual voluntary arrangement (IVA) is a voluntary arrangement between you and your creditors to pay back a certain amount of debt over the course of five years. The proposal that your representative presents to the creditors will be based on what you can afford. The majority of your creditors must agree to the proposal before it can be approved. If all creditors agree to the IVA, then you will have to follow the agreement until you pay your unsecured debt. You can use an IVA comparison or calculator to gauge your payments and decide if an IVA is the right choice for you.

The aforementioned debt payment methods are three of the most successful methods in the system. You can find your way back to financial health by using any one of them.

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