With its low rate of unemployment, one would think Utah debt relief would not be in too much demand. But the fact is, Utah’s college graduates are burdened by student loans averaging $15,509. It is also for this reason that the debt relief stats for Utah are considerably higher than the national average.
Is Bankruptcy the Answer?
Utah is one of the top states filing for bankruptcy in the past few years, some numbers placing personal bankruptcy filing at nearly 4 for every 1,000 resident. However, student loans are generally not included in debts that may be forgiven under a successful Chapter 7 filing, so that’s not help in debt relief for college loans. Moreover, changes in bankruptcy law are making it harder for people to file for bankruptcy.
Rather than bankruptcy, which will ruin your credit score for at least 7 years, it may be worth your while to consult about other debt relief options. Most reputable companies provide the initial consultation for free, so there’s no harm in finding out.
Debt Management in Utah
A better alternative may be a debt management plan. debt relief companies such as CareOne Debt Relief Services can provide the necessary counseling and guidance to come up with a DMP that is tailor fit for your needs.
Debt management is different from debt settlement in that DMPs do not require you to put up an escrow account from which payments will be made by the company to your creditors. Moreover, DMPs are normally based on an agreement between you and your creditors to pay a fixed monthly amount over a prescribed period. Otherwise, they are highly similar, and work best through the intervention of a reputable and professional debt relief company.
Both types of debt relief undergo a period of consultation, counseling and crafting of a personalized plan. The debt relief company then negotiates the terms of the repayment with the creditors. Once an agreement is reached where the debtor typically gets lower interest rates plus a waiver on late and penalty fees, then the payment begins.
Typically, debt settlement takes between 2 and 4 years, while a DMP can take up to six years. However, by the end of the period, you should be debt free.
Future Benefits of Debt Management
The good thing about DMPs is that it emphasizes the need to manage debt in general. A good Utah debt relief such as CareOne Debt Relief Services provides their clients with credit counseling and financial management advice before they are given a customized plan. After an agreement is reached, the service provider takes the necessary steps to encourage on-time payments, fostering good discipline.
This service is important in preventing your debt from getting out of control again and landing you in the same kind of trouble. Aside from the beating it will give your credit score (although nothing compared to the 7-year blight a bankruptcy will do to it), the stress of being under a load of debt is unhealthy.