Eliminating Debt Options Option 1: MPH Debt Solution Our program is an effective solution to drastically lowering your debt load by up to 60%. How does it work- once enrolled, our attorneys will start negotiating, on your behalf, to reduce your payoffs allowing you to get out of debt for pennies on the dollar. The lower payoff balances allow you to get out of debt in a fraction of the time of credit counseling/debt management or debt consolidation loans while still reducing your current monthly payments. Our specialists will be in touch with your creditors throughout the program. The goal is to get you out of debt within three years. If you can afford to pay a little more every month to pay the debt off faster, we encourage it. However, if lower payments are necessary, our counselors will work with you to set up a payment schedule and time frame that will fit your budget. Here are some of the advantages of our program: • Lower your monthly payments. • Avoid bankruptcy. • Program duration of only 2-3 years versus 5-15 years or more for Debt Consolidation Loans or Credit Counseling. • Provides the lowest total payout versus Debt Consolidation or Credit Counseling saving you more money. • Provides the most flexibility of any program in terms of monthly budgeting. • Call for a FREE, no-obligation consultation, with one of our counselors to help you determine a debt solution that works for you. Option 2: Debt Management or Consumer Credit Counseling Credit Counseling is a debt management program where you make a single monthly payment to a debt counseling agency. In turn, that agency distributes the money to your creditors on your behalf, ideally at lower interest rates so you can pay off the debt faster. Credit Counseling has come under heavy criticism from consumer groups and government regulators. One of the most misleading aspects of Credit Counseling is the "non-profit" status of most agencies. Consumers think that "non-profit" means there are no fees involved, but this is not the case. Another problem with Credit Counseling is they rely on creditors for income. How do you get objective advice from an agency that accepts compensation from your creditors? One major criticism of the Credit Counseling programs is that it simply acts as a collection agency for the credit card companies. In order to receive the benefits of credit counseling, the creditors require a minimum monthly payment which often isn’t less than your current minimum payments. This will make it difficult to get your monthly payments lowered while still taking up to six years to be debt free. Option 3: Debt Consolidation Loan A debt consolidation loan can be a good solution if you can qualify. The only problem is a debt consolidation loan will stretch your payments out over 10, 15, sometimes even 30 years in order to lower your monthly payments. Most banks issuing debt consolidation loans will want to place a lien on your home. This will shift your unsecured debt to a secured mortgage or home loan effectively eating up the equity in your house. Be careful considering this option, you are trying to solve a debt problem by borrowing more money. Option 4: Bankruptcy The most common option is "Chapter 7". This usually involves the full discharge of unsecured debts, so that the debtor no longer owes anything to his or her creditors. Another option is called "Chapter 13" and normally requires the debtor to pay back a percentage of the debt, usually over a 3-5 year period, on a payment schedule determined by the court. The court decides which option you qualify for. Bankruptcy should be viewed as a last resort for the obvious reasons. One of the many adverse effects declaring bankruptcy is your credit. A bankruptcy typically will stay one your credit report for 10 years, making it difficult to qualify for home and car financing. Even if you are able to qualify for these loans you will pay higher rates and costs because the lenders will view you as a high risk. Many people file bankruptcy to put a stop to harassing collection agencies, when they would prefer to work out a plan to deal with their obligations rather than walk away from them. Option 5: Do Nothing Obviously, this is not a very good option. If you can barely afford your minimum monthly payments, you are stuck in a terrible cycle where the only one who wins is the credit card companies. Most credit cards accounts can not be paid off inside of ten years making minimum monthly payments and the amount of interest you will pay is staggering.