Types of Debt Relief and Which One Is Best for You
Many people seek out debt relief companies to negotiate with unsecured creditors and receive a lump sum settlement in exchange for regular payments into an account. The companies then pay themselves from the account. The savings may be worth the fee if the company successfully negotiates your debt. However, if you do not qualify for debt settlement, the last option is bankruptcy. Your lender will review your situation and decide whether to accept your debt settlement offer, so it is important to understand that a bankruptcy filing is a last resort.
The key to successful debt relief is finding the right program. It is not right for everyone. If you’re adding to your debt each month, you won’t qualify. That’s because you have an underlying spending problem. Debt relief services will only be effective if you’re willing to address the root cause of your spending problem. Most companies will ask you to stop using your loans and credit cards. If you’re unable to do this, your problem will only compound.
You may be eligible for some forms of debt relief, such as bankruptcy and credit counseling. Although many nonprofit credit counseling agencies claim to reduce debt, there are some scams out there. It’s important to check the DOJ’s list of approved credit counseling agencies to avoid fraud. Alternatively, you can seek the advice of your local bankruptcy attorney to choose a reputable relief agency. Before you decide on a debt relief plan, it’s important to determine how much you can afford each month. Review your expenses, including the interest rates and penalties.
Debt management is similar to deferment, but usually has shorter terms. Your lender may grant you forbearance when you’re first experiencing a financial hardship and before you start falling behind on payments. For mortgages and student loans, forbearance is typically more suitable. But, be aware that interest charges usually still accrue. For credit card debt, however, it’s easier to qualify for this type of debt relief. If you’re eligible, you should plan on becoming debt free in two to five years.
You can also seek the services of a nonprofit credit counseling agency. These nonprofit organizations will provide you with budgeting help, debt management plans, and credit counseling. Additionally, many nonprofit credit counseling agencies will also handle debt settlement. Ultimately, choosing a debt relief service will depend on your budget, your personal circumstances, and your financial situation. It’s essential to shop around before settling for a relief company. If you find a company that’s right for you, it will make the process easier for you and protect your credit.
Before you decide to file for bankruptcy, make sure you exhaust other debt relief options first. Bankruptcy will stay on your credit report for seven years, making it difficult to get credit, rent an apartment, and even get a job in certain industries. If you’re not sure which debt relief option is right for you, speak with your financial advisor. A debt settlement program may be your best option. However, it is essential to do some research and find a program that fits your needs and goals.
If you’re not sure which debt relief option is right for you, Accredited Debt Relief can help. Their consultants offer free consultations, calculate your debt and open an escrow account for you. Once you’ve accumulated enough money in the escrow account, Accredited Debt Relief will negotiate on your behalf. Then, you can pay off your creditors and feel much better about your financial situation. With no hassles, you’ll be on your way to debt freedom.
Debt relief efforts have been aimed at reducing poverty and promoting economic growth in developing nations. While these efforts have made significant strides in reducing debt burdens, there is still a long way to go before debt levels become unsustainable again. Debt sustainability requires efforts from borrowers, lenders, and donors to achieve economic growth, diversify exports, and access to markets in developed countries. The international community is focusing on strengthening links between debt relief and poverty reduction and the implementation of policies that encourage debt management and economic development.
The TSR bill, updated in 2010, prohibits misleading customers about their services and charges. It also prohibits debt settlement companies from blocking customer access to dedicated escrow accounts, which are used to help build funding for debt settlements. These escrow accounts are owned by the customer and are available to be withdrawn at any time. These practices are also illegal. The TSR bill is not applicable to nonprofit organizations or lawyers. For more information about TSR and other debt relief laws, visit the Dodd-Frank Consumer Protection Act website.