So, you finally accept that you need a serious plan to get yourself out from under all that worrisome and mounting debt. You never thought you’d be in such trouble, but here you are. The good news is that you have options. There are smart ways to get control over your debt, one of the popular ones being debt relief. Let’s explore that financial strategy and see if it works for you.
Just What is Debt Relief?
Also known as debt settlement, debt relief is when you get a firm to go to your creditors to attempt to negotiate a deal wherein you make a lump sum payment in full of less than what you owe to have your debts settled. It’s true that creditors typically cooperate because if you file bankruptcy — your likely next move, otherwise – they know they probably will lose out.
How Does it Work?
You’ll have a consultation in which your situation will be assessed, followed by creation of a payment plan. After that’s done, you’ll begin dropping money monthly into an escrow-type account over which you have control. This account will be used as leverage during negotiations with your creditors. Once you’ve put aside enough – that amount will be determined by your income and enrolled debt total – your company will go to bat on your behalf. Upon each settlement, which you must approve, the agreed-upon amount is paid from your account.
Will That Hurt My Credit?
In the short term, your scores will drop, only to rebound, and then some once you’ve completed the program and you begin to rebuild your credit, which isn’t the greatest now anyway, right? And remember that bankruptcy can stay on your credit report for up to a decade, depending on the kind you file.
Aren’t There Debt Relief Scams?
While most debt relief companies are on the up and up, it still makes sense to know with whom you’re doing business. Research the reputation of any firm before doing business with them.
What you need is a company that is reputable, established, and accredited. Freedom Debt Relief is one such company. It was established in 2002, and since then has settled more than $12 billion in consumer debt for some 750,000 clients.
“At its core, Freedom was born out of the fundamental need to help unserved, struggling and striving American families, level the playing field by providing them with equal opportunity to move forward in their finances,” said Brad Stroh, Freedom Debt Relief co-founder.
“Unfortunately, the issue of financial equality remains all these years later. The disparity limits opportunity and creates a widening of the classes, which in turn limits mobility and the opportunity to move forward. That’s why our mission at Freedom is as critical today as when we launched nearly two decades ago.”
What Kinds of Debt Are Accepted?
It depends on the company, but most of your unsecured debt – debt that isn’t moored to collateral such as your house or car – can be enrolled. Debt from credit cards, medical bills and personal loans are some of the most common.
How Much Can I Expect to Save and How Long is the Process?
Again, it depends on the company and your debt load, but you might be able to save up to half of what you originally owed. And programs typically run between 24 and 48 months, depending on your debt load and the size of your account.
Now you know that one of the smart ways to get control over your debt is through debt relief. If the strategy suits you, just pick a reputable, established, and credible firm to help you. Freedom Debt Relief is one such example.