How to Pay Off $20,000 in Credit Card Debt Finding…
Boston Personal Debt Relief and Personal Debt Settlement[yoast-breadcrumb]
Finding Debt Relief in Boston
Debt can feel like a heavy burden. When bills pile up and balances grow, it’s easy to feel overwhelmed. You may be struggling just to make minimum payments each month. If this sounds familiar, you’re not alone. Many people face financial hardship and debt at some point in their lives. The good news is that you have options in Massachusetts. There are ways to reduce and eliminate debt through programs like debt settlement or bankruptcy. This article will explain the debt relief options available to Boston residents. We’ll go over the pros and cons so you can make an informed decision.
Debt Settlement in Boston
Debt settlement, also called debt negotiation, can help you pay off debt for less than you owe. Here’s how it works — you stop paying your creditors and instead put money in a secure account. Once there’s enough saved up, the debt settlement company will try to negotiate with your creditors. They’ll offer a lump sum payment that’s less than the total balance. Creditors often accept since they’d rather get something instead of nothing if you default.
Debt settlement can save you thousands of dollars. However, it also comes with risks. Your credit score will drop when you stop making payments. Creditors can still sue you for the full amount owed. Debt settlement also won’t stop collection calls and letters. And any forgiven debt may be taxable income [
The Fair Debt Collection Practices Act (FDCPA) limits how collectors can contact and treat you. They can’t harass or lie, contact you at work if you ask them not to, or call before 8 am or after 9 pm [
Debt settlement works best for unsecured debt like credit cards, medical bills, and personal loans. It may not help with secured debt like auto loans or mortgages where your assets are collateral. Student loans are also difficult to settle.
Look for reputable debt settlement companies like National Debt Relief that charge fees based on savings. Beware of firms asking for large upfront costs. Make sure to read reviews and check with the Better Business Bureau.
Bankruptcy in Massachusetts
Declaring bankruptcy erases eligible debt and stops collections. In return, you surrender any assets above Massachusetts or federal exemption levels. Bankruptcy stays on your credit report for 7-10 years. There are two main types – Chapter 7 and Chapter 13. Let’s compare them:
Chapter 7 Bankruptcy
Chapter 7, or liquidation bankruptcy, wipes out unsecured debt like credit cards and medical bills. You can keep exempt property like a home, car, clothing and household items up to a certain value. Nonexempt assets could be sold to pay creditors.
With Chapter 7 you get a fresh start relatively fast. The bankruptcy process takes just 3-6 months. Collection calls and lawsuits also must stop when you file. However, you can’t file Chapter 7 again for 8 years. Some debts like student loans and alimony can’t be discharged. You’ll struggle to get new credit right after Chapter 7.
Chapter 13 Bankruptcy
Chapter 13 allows you to keep assets like a house or car. You get 3-5 years to repay debt through a court-approved payment plan. How much you pay depends on income and expenses. Any remaining balance after the repayment plan is discharged.
Chapter 13 has no asset liquidation. It also looks better to lenders than Chapter 7. However, the repayment plan can be difficult to complete. If you fail to make payments, your case could get converted to a Chapter 7.
Talk to a bankruptcy attorney like those at The Law Offices of John J. Aquino [https://www.aquinolaw.net/] to discuss your specific situation. They can provide legal advice on the best debt relief option.
Other Debt Help in Boston
If you need more affordable ways to pay off debt, here are some options:
Debt management – Work with a credit counseling agency to consolidate debt into one payment. The agency negotiates lower interest rates. You pay off debt over 3-5 years.
Balance transfer cards – Transfer balances to a card with a 0% intro APR. This gives you over a year to pay down debt interest-free. Just be sure to pay the balance before rates go up.
Debt consolidation loans – Combine multiple debts into one personal loan with fixed payments. This can simplify repayment and sometimes lower monthly costs. Be wary of predatory lenders charging very high interest rates.
Home equity loan – Tap home equity to pay off higher interest credit cards and other debt. This turns unsecured debt into secured debt against your home.
Part-time work – Pick up a side gig like Uber driving, bartending or tutoring to earn extra money towards debt. Every little bit helps knock down balances.
Budgeting apps – Apps like Mint help you track spending so you can cut expenses and free up more to pay creditors.
Negotiate payments – Call creditors directly to ask for lower payments or interest rates. Many grant temporary hardship programs if you can’t pay.
Don’t be afraid to ask for help getting out of debt. Reach out to nonprofit credit counseling agencies like Money Management International. They offer free debt and budget counseling.
Debt relief won’t happen overnight. But with commitment and a plan, you can overcome debt for a brighter financial future. There are options like debt management, settlement and bankruptcy to find freedom from burdensome debt. Seek help from reputable sources. And know you’re not facing debt alone – many Bostonians have been where you are. Things can and will get better.