Although you tried hard, you couldn’t keep up with your credit card debt. In fact, you have fallen even deeper. Well you have an option to run out of bankruptcy and it is called debt relief. While no financial strategy is perfect, debt relief has helped dozens of people just like you.
Here is the truth about credit card debt relief.
What is debt relief?
Also called debt settlement, debt relief involves bringing in a company to see if your creditors – primarily credit card companies – will allow you to pay less than the full amount you owe to “settle”. »Your debts once and for all. And why would they do that? Well they can see what shape you are in, and know that if you drop bankruptcy, they probably won’t get anything.
How Does Debt Relief Work?
After an initial consultation with a company such as Freedom Debt Relief, you will have a plan formulated just for you. You will be asked to start making monthly deposits to a savings type account that you control. When you’ve saved enough – the amount will depend on your debt and income – your business negotiators will speak to your creditors on your behalf. Once each settlement is reached and accepted by you, the funds will flow out of your account.
Won’t debt relief hurt my credit?
The debt relief process requires that each of your creditors receive a one-time payment in full to meet your obligations. Because you pay your creditors indirectly – from your account – and only after a settlement, your credit will suffer a temporary decline. Once all of your settlements are met and you rebuild your credit, your scores will rebound and then some.
How Long Does Debt Relief Take?
Credit Card Debt Relief – which is basically what debt settlement is – takes anywhere from two to four years, which might sound like a long time, but not compared to the time it would take to try and pay off your debts on your own. Now it would take years, if not decades. Plus, your first settlement will likely come in a few months.
How Much Does Debt Relief Cost?
It depends on the business, but you can have 15-25% of your debt listed. But do you know how “priceless” things can be? It would be your new peace of mind.
Aren’t there a lot of scammers in debt relief?
Not a lot – unless YOU are caught, of course. The point is, most debt relief agencies are up and up. However, it is also true that there is some bad actors there who are more interested in parting with your cash than getting you back on track financially.
What you want is a reputable, credible company with a proven track record. You also want accreditation, so find a company that is a member of the American Fair Credit Council and the International Association of Professional Debt Arbitrators.
What you don’t want is a business charging upfront fees – before they’ve paid off a single debt. It is against the law, by the way. Make sure the company is transparent about their pricing structure and doesn’t force you to sign up. Sometimes companies promise too much or make guarantees, which are further red flags. While debt relief is a popular and broadly wise strategy, negotiations, by their very nature, are unpredictable.
Now that you know the truth about credit card debt relief, you can act with confidence if the approach is right for you. Just make sure you pick a credible, established business to help you out, and you’ll be back on track in no time.
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