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 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.
- 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.