Debt relief can be an effective way to finally toss off that financial albatross and get a clean start – IF you pick the right company. You need an experienced, credible company that knows what it’s doing. To that end, here are some qualities of the best debt relief programs.
What is Debt Relief?
Also called debt settlement, debt relief is when you pay a company like Freedom Debt Relief to see if the companies you owe – credit card issuers, mostly – will accept less than the full amount to resolve your obligation. While everyone wants every penny owed them – don’t you? – such creditors usually agree to negotiate since they know full well that if you file bankruptcy, there’s every chance they’ll get zilch.
How Does Debt Relief Work?
If all starts with a consultation with the debt relief company during which your finances will be assessed and a payment plan will be created. Instead of paying your creditors directly, those funds will ultimately come from a savings-type account that you control. But first, you must build up that account with monthly deposits. Once you’ve saved enough – the amount is determined by your income and debt load – the company’s negotiators will go to your creditors on your behalf, using the account as leverage. Upon each settlement, and approval by you, the creditor is paid.
Won’t Debt Relief Hurt My Credit?
The debt relief process will depress you scores – for the time being. Once you’ve completed the program and begin to rebuild your credit, your scores will improve nicely. Remember, too: your scores haven’t been good for some time now.
How Long Does Debt Relief Take?
It depends on the company and the size of your debt, but it usually takes between 24 and 48 months to have all your debts settled – much less time than it would take if you were to try to clear your debts by making minimum payments. Why, that would take forever. Remember, too, that you didn’t get into this mess overnight.
What About Scams?
While most debt relief companies are on the up and up, this industry, more than many, has a few bad actors who are more eager to gain your cash than to help you out of your situation.
The good news is that the best debt relief programs have common qualities that can help you separate the unscrupulous agencies from those that are legit.
What Are Signs of a Good Debt Relief Program?
For one, it’s accredited. You want a company that is a member of the American Fair Credit Council and the International Association of Professional Debt Arbitrators. If the company you’re interested in isn’t, that’s a red flag that you might be dealing with a scam agency.
It also doesn’t charge you up front. That’s illegal, although it doesn’t stop the bad guys. A credible company will only bill you once a settlement is reached. Run away fast from any company that does the opposite.
What’s more, a reputable company won’t try to overwhelm you with “guarantees” of easy settlements by a date certain – and before it’s assessed your situation. While most negotiations are successful, negotiations by their very nature are unpredictable.
In addition, a good debt relief program doesn’t do robocalls. Call the company back at your peril; you might end up in worse shape than you are now. Finally, a solid company will give you everything in writing all terms and fees. Don’t just take its word for it.
Now that you know the qualities of the best debt relief programs, you can find a company that’s credible, reputable, and established. Just do your homework.
