You’ve carried around that burdensome debt long enough, and you’re officially tired. You’ve decided on debt relief to get you back on track, but you’re unsure which company to choose to help you, particularly with all the scammers out there. The good news is that established, effective companies stand out. Below are traits of the best debt relief programs.
What is Debt Relief?
Let’s get that squared away. Debt relief, also called debt settlement, is the process of hiring a company such as Freedom Debt Relief to go to your creditors – typically credit card issuers – and see whether they’d be up for letting you pay just a portion of the amount owed in a one-time payment to “settle” your debt. Creditors are typically amenable because they understand that a bankruptcy filing – your likely next step if they say no – would likely net them zero.
How Does Debt Relief Work?
After an initial assessment of your financial situation and your subsequent program enrollment, you’ll be asked to deposit funds monthly into an escrow-like account. These monies will ultimately be used to pay your settlements. Once you’ve saved the amount agreed to in your plan, company negotiators will start talks with the people you owe. After each settlement is reached, and approved by you, the creditor will be paid from your account.
Won’t This Hurt My Credit?
Not for long. While the process of debt relief will cause a temporary credit score downturn, those scores will rebound and then some once you’re done with the program and you’ve built your credit back up.
And remember: your scores aren’t the greatest right now anyway. Right?
How Long Does Debt Relief Take?
Between two to four years. Not long, really, compared with the time it took for you to get into such trouble. It’s also much, much less than the time it would take to pay your debts off if you were to make minimum payments. That would take … forever!
How Will I Know I’ve Picked a Good Debt Relief Program?
For one thing, the best debt relief programs are accredited. Look for membership in the American Fair Credit Council and the International Association of Professional Debt Arbitrators. As we say, there are some rogue companies out there that are more interested in separating you from your cash than fixing your situation.
You also want a company that’s transparent about its fee structure and doesn’t charge you upfront for services it has yet to perform. If a company bills you off the rip, run away fast. That’s likely a scam.
What’s more, stay away from agencies that won’t provide information about its services unless you give them info about your debts, including account numbers.
In addition, if a company seems over-eager to the point of pressuring you, tell it to kick rocks. There are plenty of legit companies out there. You also don’t want any over-promising or guarantees. While debt relief is a highly successful strategy, negotiations are, by nature, unpredictable.
Good relief companies are also reachable. Simply because a company has a website doesn’t mean it’s legit. Be wary if online enrollment is available but you can’t speak with an actual person. If you have any doubts, run the name of the company you’re interested in by your local consumer protection agency or your state’s attorney general to see whether there have been complaints.
Now you know the traits of the best debt relief programs. Debt relief has helped scores of people like you to get out of debt. Just be sure to pick a reputable, credible, established program, and you’ll be on your way.