The financial conditions of the people today are very bad.
With addition to the rapidly mounting debts, inflation and surging oil prices also with low wages, one can now imagine how horrible it has gotten to survive in this world.
To solve these problems people relied on credit cards extensively and were unable to pay the bills.
Thus this created more chaos and confusion.
But now thanks to the government new debt relief options are introduced to help out people get rid of credit card liabilities.
Back in time when a person use to suffer from liabilities he used to file for bankruptcy but it is just out of the question because the new laws have made it so haunting that whoever will attempt it will suffer from more trouble.
But today's problems caused more and more people to file for bankruptcy.
It had to stop otherwise the whole economy would have undergone huge disasters.
The new debt relief options include debt settlement program and debt consolidation loan.
Following is a brief introduction about them: DEBT SETTLEMENT: Also known as debt negotiation, this is a method in which the lender and the borrower agree on a reduction of the outstanding balance.
Customers have two options either they can negotiate with themselves or get in touch with a lawyer or debt settlement companies.
Today, creditors have a preference to keep hold of at least some portion of the outstanding balance rather than letting go of everything.
If a borrower is unable to contract with the present amount, he can reach a settlement with the creditors who would deduct late fees charges and other penalties sustained due to non payment.
Other than this, they will settle for a lowered payable outstanding amount.
This proves to be a win-win situation for both parties.
The borrower now faces a reduced balance and the creditors would get to recover part of the amount rather than nothing at all.
DEBT CONSOLIDATION LOAN: Paying different loans and bills can have a harmful affect on one's financial condition.
This can be taken care of if one takes the option to consolidate debt.
These loans combine one's existing loans into one single loan which requires a single payment.
Besides eliminating the need of looking after several confusing loans, these loans also offer a lower rate of interest which translates into easy monthly installments.
Nonetheless, these loans are secured through real estate and if one does not own one, he cannot get this loan.
Also, the risk of foreclosure of the mortgaged real estate becomes visible large in case of nonpayment.