1. Continue on the path of minimum monthly payments We’ve been taught to always make monthly payments to our lenders and eventually pay back our outstanding debts, but what if you can only make the minimum payments each month? While you’re doing the right thing by keeping up with your payments, this strategy will take years of minimum monthly payments to pay off the debt and accrued interest, or you may never pay it back at all. In addition, by only making minimum monthly payments on your credit cards with high-interest rates, everything you pay for using it becomes way more expensive, with interest compounding each year. If you can never get ahead of your debt, it may not make sense to continue on the same path of only making minimum payments. 2. Balance Transfers Credit card companies will offer low introductory interest rates on new credit cards that encourage users to transfer the balance of their high-interest credit cards to a new credit card with a low-interest rate. The problem with this approach is that the low introductory interest rate lasts only up to six months, and then you are in the same position you were in before. This will likely affect your credit rating as your average debt history on each credit product you own will decrease. Also, if you face some sort of hardship after your balance transfer, adding this debt to a debt settlement agreement will be difficult as it’s considered new debt, even though it’s old debt moved to a different credit card. The worst case scenario is it may appear you have committed fraud if you are looking for a debt settlement agreement after completing a balance transfer. 3. New York Debt Management Program A Debt Management Program is where you make a single monthly payment to a credit counseling agency. That agency then distributes agreed payments to your creditors on your behalf. With this form of debt relief, you will still end up paying the total amount of your debts. Ideally, the credit counseling agency will have your lenders agree to reduced interest rates, reducing the time it will take to pay off your debts. A Debt Management Plan in New York is designed to be paid within 3 to 5 years, and you must agree not to take on additional credit during this period. The drawback to debt management programs is the agreed reduced interest rates with your lenders are often not much less than your current interest rates, and you have to pay a monthly fee to the counseling agency. Also, this debt relief option will show on your credit report that a counseling agency is making debt payments on your behalf, and it will look like you’re either bankrupt or close to bankruptcy. 4. New York Hardship Programs Debtors can reach out to their creditors to request interest relief on their debt due to hardships like injury, divorce, loss of income, and so on. The problem with this debt relief option is that creditors will only offer to reduce your interest rate and monthly payment but will not reduce your principal. This will make your debt situation worse as it will continue to grow during the relief period. 5. New York Debt Consolidation Loan A debt consolidation loan helps you manage your debt by consolidating your outstanding debts into one loan with a lower interest. For example, suppose all your outstanding loans are consolidated under one loan. In that case, you will only make one monthly payment that is lower than your current combined payments or is the same, resulting in you paying off your consolidated loan sooner. A drawback with debt consolidation loans is that you initially put yourself in more debt. It may also reduce your credit score if you cancel the credit accounts after you transfer their balances. A lower credit score will increase your cost of borrowing and how lenders will view and treat you. 6. New York Secured Debt Consolidation Loan There are options to get a secured debt consolidation loan where the lenders can take the secured asset if the loan isn’t paid back. The trouble with this type of debt consolidation loan is that borrowers can lose their house, vehicle, or anything else they pledged as security for the secured consolidation loan. 7. Debt Settlement or Debt Negotiation in New York Debt settlement is when you agree with each of your lenders to reduce the principal debt amount you owe to a more manageable amount. To ensure you receive the lowest debt settlement with your lenders, work with an expert debt relief company like CuraDebt to negotiate with your lenders on your behalf. 8. Declaring Bankruptcy in New York – Last Resort Bankruptcy is an option of last resort for people who can’t meet their debt obligations. A declaration of bankruptcy will stop the debt collection process, and you will no longer owe some or all of your unsecured debt. Declaring bankruptcy can be an emotional process and you can be asked in future job interviews if you have ever declared bankruptcy, which may reduce your chances of getting the jobs you’re interviewing for. Also, many do not qualify which results in debts being excluded. 9. Merchant Cash Advance Loan A Merchant Cash Advance (MCA) loan is secured against a business’s receivables. The trouble with this option is if the business doesn’t make payments on the MCA loan, the lender will send letters to the business’s customers asking them to pay them directly and not to the business. This situation has resulted in many companies being forced into bankruptcy. Return to top