Debt Reduction Options

There are many debt reduction options to chose from. You can feel confident about choosing Debt Freedom Institute of America to help you reduce your debt. Call us before it's too late and join many satisfied customers like the Sousa's.

Just a quick note to thank you for the great job you did in helping the Sousa's on improving their credit scores. When we repulled the new credit report the scores were even higher than you quoted, enabling the Sousa's to purchase a home. Looking forward to referring you many more of my clients!
Richard Phillips, Senior Loan Officer
Fairfield Financial Mortgage Group, Inc.

The programs that Debt Freedom Institute of America offer are more valuable and necessary than ever. Credit counseling for individuals is required under The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. In what appears to be a two-tiered requirement, both initial eligibility and receipt of discharge are conditioned by counseling requirements.

Self help

• Take stock of your finances and make debt reduction your first priority.
• List all your sources of income.
• Identify necessary expenses, and prioritize the rest.
• Track your spending patterns.
• Cut back on unnecessary spending.
• Stop using your credit cards and apply extra cash to reducing balances.
• Find ways to generate extra income.
• Develop a budget and stick to it.
• Watch your debt go down.

If you are still having trouble:
Immediately contact your creditors if you can’t make the monthly payments. Tell them why you can’t pay, and try to work out a plan that makes your payments more manageable. Don't wait until you hear from a debt collector. At that point, your creditors are not interested in working with you.

If you think you might default on your car loan, it may be better if you sold the car and paid off the debt: This way you can avoid the costs of repossession and a negative entry on your credit report.

If you fall behind on your mortgage, contact your lender right away to avoid foreclosure. Most lenders will work with you if they believe you are acting in good faith and the situation is temporary. If you and your lender cannot work out a plan, contact a housing counseling agency.

Debt Consolidation

You may be able to consolidate your debt by taking a second mortgage or a home equity line of credit. These are secured loans using your home as collateral. If you default— you could lose your home.
In addition to interest, you may have to pay "points," with one point equal to one percent of the amount you borrow. But, these loans may give certain tax advantages that are not available with other kinds of credit.

Credit Counseling and Debt Management Plans

If you can’t do it yourself, can't work out a repayment plan with your creditors, or can't keep track of rising bills, and you don’t want to file bankruptcy, consider contacting a credit counseling agency. A credit counselor may recommend that you enroll in a debt management plan (DMP). A debt management plan by itself is not credit counseling, and debt management plans are not for everyone. You should sign up for a debt management plan only after a certified credit counselor has thoroughly reviewed your financial situation, and has offered you advice on managing your money.

Bankruptcy

Personal bankruptcy is usually considered the option of last resort because the results are long-term. A bankruptcy stays on your credit report for 10 years. It can offer a fresh start for people who can't satisfy their debts. There are two primary types of personal bankruptcy: Chapter 13 and Chapter 7. Each must be filed in federal bankruptcy court. Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments, utility shut-offs, and debt collection activities. Both also provide exemptions that allow people to keep certain assets. Unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or lien on it.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 goes into effect on Oct 17, 2005 and requires individuals to get credit counseling.

Would you like us to help?

Learn more about our Debt Management Programs.

You don't need a home to qualify!