Is Debt Relief Right For You?

Is Debt Relief Right For You?


While debt relief programs won’t suddenly erase your debts, they can help you take steps to reduce or eliminate your debt over time. Consider working with a debt relief company to negotiate with creditors on your behalf and potentially get your debt under control.

  • Do you have a large amount of unsecured debts like credit cards or medical bills?
  • Are you only able to make minimum payments due to finances being stretched too thin?
  • Is your debt causing concern, stress, or panic?

A debt relief program may be right for you.

How Does Debt Relief Work?

  • The debt relief company works with you to select the right debt relief options for you.
  • A debt relief company may negotiate with your creditors on behalf of you to reduce or eliminate your debt.
  • Consolidate multiple monthly payments down to one single monthly payment.
  • Although debt relief isn’t a magic solution to getting out of debt, it can cut through the chaos of due dates and collections calls.

Types of Debt Relief Options

Debt Consolidation Loans

  • Takes multiple debts and combines them into one loan.
  • Debt consolidation loans work best if you have:
    • Steady income
    • Discipline to not take on more debt
    • Good credit
  • Consolidating debt loans can reduce the stress of multiple payments, due dates, and creditors. You’ll only have to worry about making one payment.

Debt Settlement

  • Debt settlement can reduce the total amount of money you owe.
  • A special debt settlement account is set up in your name. You’ll make monthly deposits to the account so the funds grow over time.
  • The debt settlement company negotiates with your creditors to reach a legal agreement to settle your debts.
  • Debt settlement is the preferred option for many people who are not qualified for additional financing products.

Credit Counseling

  • Typically, credit counseling is a free resource provided by nonprofit financial education organization.
  • A credit counselor will work with you to help you improve your individual financial situation.
  • They may offer tools and resources to help you gain control over your money.
  • You may have fees reduced, but credit counseling doesn’t usually reduce the total amount of debt you owe.

A Last Resort: Bankruptcy

  • Used only if no other debt relief plan is possible.
  • In rare cases, bankruptcy may completely remove your debts. However, there are high legal and court fee costs to bankruptcy so you will likely still need to pay a hefty sum.
  • Bankruptcy can stay on your credit history for up to a decade and make it difficult to get approved for mortgages, car loans, and other credit accounts for years to come.
  • Many bankruptcies end with a creditor recouping some of the money you owe by liquidating your assets.

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