A recent news report revealed a family of four with an income of $117,400 or less is living below The City’s threshold of poverty. In what world could you ever imagine a six-figure income would find you classified as low income? And yet, as beautiful as San Francisco is, that’s the ugly reality lurking behind the Golden Gate’s glittering façade.
If you’re the head of one of those San Francisco households, your ends are probably spreading farther apart each month—despite your most earnest attempts to get them to meet. Fortunately, San Francisco residents have a number of viable debt relief options. Rather than lying awake staring at the light on the smoke detector every night perhaps it’s time you contemplated some form of debt relief.
Here are a few to consider.
Debt Consolidation in San Francisco
You might qualify for a debt consolidation loan, which will enable you to attack all of your debts at once—and usually at a lower interest rate. In most cases, your credit rating will still need to be pretty strong to qualify.
To get the best result with consolidation, you’ll need to ensure the single monthly payment is lower than the total of the payments you’re currently making each month. You’ll also want to make sure you won’t be paying considerably more for the consolidation loan than you would by paying each debt individually.
Credit Counseling, a Bit of Advice
Credit counseling organizations review your budget, evaluate your options and recommend a plan of action. They can often help you refocus your earnings to handle your debts while still meeting your household obligations. Even better, several non-profit organizations offer this service free of charge.
In cases where reworking your budget won’t help, credit counselors may recommend debt management. Under this approach, a debt manager will negotiate a deal for reduced interest rates and fees with your creditors in exchange for paying your debts off within three to five years.
Rather than continuing to make monthly payments to your creditors, you’ll put the money in a fund from which the manager will pay your bills. Your credit score will take a bit of a hit, but you can always rebuild it after you complete the program. If you decide to go with debt management, be certain you can live up to the plan though. Defaulting on it will leave you in a far worse situation.
Debt settlement and debt management have a couple of key similarities.
A payoff deal is negotiated with your lenders here too. However, debt settlement goes one step farther and exchanges lower total payoff amounts for the promise of settling your debt; often when paying it in full are unfeasible.
You’ll make deposits into an FDIC insured third party escrow account with debt settlement too. However, rather than paying your bills each month, this cash is permitted to accrue until the balance is sufficient to start settling your debts. This process continues until each of the settlement agreements negotiated on your behalf has been satisfied.
And yes, this method is even harder on your credit score, but not as hard as the next option. Be sure to explore how each option will affect you in the short and long term.
In addition to wiping out most forms of debt altogether, filing for bankruptcy protection preserves your home, car (up to a certain value) and clothing. On the other hand, your credit report will reflect the filing for as many as 10 years. Even then, most student loans, alimony, child support and back taxes are exempt, so you’ll still have to meet those obligations.
Request a free debt evaluation to find out how we could help you:
- Resolve your debt faster
- Significantly reduce what you owe
- Make one low monthly program payment
Debt Relief in the Bay Area
Which of these debt relief options is best will vary depending upon your credit rating, your income, the total amount of your obligations and the type they are.
Debt relief professionals, like those employed by Freedom Debt Relief, can help you evaluate your circumstances and choose between consolidation, counseling, management, settlement, and bankruptcy. Consultations are provided to San Francisco residents free of charge, seven days a week.
Call Freedom Debt Relief today at 800-910-0065