As in other states, many consumers in Louisiana struggle to pay debts that have become overwhelming. There are several ways to achieve debt relief, though some are more effective than others. Typically, a debt settlement company collects payments from the consumer and negotiates a settlement with the creditor. Once an agreement is reached, the accumulated payments held in a dedicated account are used to pay the creditor.
Another option is credit counseling by which an agency negotiates lower interest rates and reduced monthly payments with credit card companies. The consumer then pays one predetermined amount per month to the counseling agency that, in turn, pays the different credit card companies. The total amount of debt is paid over an extended period, and fees to the debt counseling agency are extra when applicable.
Debt consolidation is also a possible consideration. Although disciplined consumers can do this on their own, debt consolidation services are available at a price. The process involves obtaining one loan to cover all debts and then paying one amount per month on the loan. Those who do it themselves normally utilize balance-transfer credit card deals or home equity loans.
While every one of the above methods can provide debt relief, none of them offers the same level of protection as bankruptcy. The most appropriate step to take may be to consult with an experienced bankruptcy attorney who can explain the pros and cons of each debt relief option, including Chapter 7 or Chapter 13 bankruptcy. Being fully informed may allow an Louisiana consumer the opportunity to establish a basis for a fresh financial start.
Source: wtvm.com, "Understanding the pros and cons of debt relief", Andrew Housser, Accessed on Nov. 25, 2016