When you’re overwhelmed with debt, it can be difficult to take control of your finances and work your way out. Debt relief, which is any program or strategy that makes it easier for borrowers to pay off their debts, can reduce your stress and help you pay your financial obligations faster. Whether you're buried in a mountain of debt or are simply looking to lower your interest rates and make your payments more manageable, a debt relief program may be able to help.
How Does Debt Relief Work?
When it comes to debt relief, you have options. While your individual situation will help determine what method of debt relief is best for you, all debt relief methods focus on the goal of reducing or eliminating debt.
Besides managing your debt repayment on your own, there are four common debt relief strategies:
- Debt Consolidation, which takes multiple debt obligations and combines them into one debt. This reorganization of your debts can help eliminate the problems that come with juggling multiple payments and communications with creditors, but it does not address your spending habits. Debt consolidation is best for those with high credit scores and a clear plan for avoiding debt in the future.
- Debt Settlement, which is a specific form of debt consolidation that involves redirecting all of your monthly payments to a debt settlement account while a team of specialists communicate with creditors on your behalf. Once you have saved enough funds in your debt settlement account and the negotiators have worked out a legal settlement agreement, the funds you have saved in your account will be sent to your creditor as part of a lump sum offer or payment plan. Often times, debt settlement companies are able to work out settlements that are lower than what you originally owed your creditor.
- Credit Counseling and Debt Management, which sets you up with a credit counselor who will analyze your current financial situation and provide you with budgeting help. Credit counselors can introduce you to financial resources, help you with your debt repayment strategy, and recommend a debt management program should you qualify.
- Bankruptcy, which is a legal process that allows debtors relief through the discharging of their debts or creating a debt repayment plan. Bankruptcy can be considered a “last resort” option due to the length of time it can stay in your credit report.
Do Debt Relief Programs Hurt Your Credit?
Depending on the debt relief option you choose, there may be a significant initial effect on your credit score. However, as you pay down your debt, your credit score can rise again over time. Further reading on how debt relief programs affect your credit can be found here.
Finding the Best Debt Relief Company
At Accredited Debt Relief, we help people in many states get started on a debt relief plan. We understand the stress and fear caused by debt, and we’re committed to answering your debt relief questions and creating customized programs that can help you overcome your debts faster. With our help, you may be able to ultimately pay off your enrolled debts completely and reduce the amount of stress caused by debt. Contact us today for a free consultation.
Accredited Debt Relief, Inc provides debt relief services in the following states:
AK, AL, AR, AZ, CA, CO, FL, IA, ID, IN, KY, LA, MA, MD, MI, MO, MS, MT, NC, NE, NM, NV, NY, OK, PA, SD, TN, TX, UT, VA, WI, and Washington, D.C.