Your monthly bills are piling up now, and you can no longer manage them. In fact, you’re overwhelmed. You’ve been unable to handle your debt load by yourself, so debt resolution seems like the way to go. But how does one go about choosing a debt resolution company? Keep reading.
Explain Debt Relief
This refers to the existing multiple strategies, including debt resolution, that aim to make debt easier to handle or to eliminate it altogether.
This can mean getting a lender to reduce your interest rate and monthly payments, or even the amount owed. It also can mean getting the lender to extend repayment terms.
Am I a Debt Relief Candidate?
You may be if:
- You’re delinquent on bills
- You’re not yet behind, but can barely afford payments
- You’re not making progress managing your debt by yourself
- You’ve considered bankruptcy
You may not be a candidate if:
- You don’t wish to commit to repaying your debt over the long haul
- You keep adding to your debt load
Kinds of Debt Relief
We’ll focus here on the handful of top debt relief programs. Note, though, that none will work unless your spending is under control, and you can remain committed to a process that could take between three and five years.
Credit Counseling
Here, you’ll get a credit counseling agency to help you develop a budget and advise you on debt and money management. The certified counselor, who is trained in budgeting, debt management, and consumer credit, can also help you obtain your credit reports and may offer complimentary workshops and educational materials.
Debt Management
If your financial problems are acute, the credit counselor may recommend enrollment in a debt management plan (DMP). You select which debts to enroll in the program, and you’ll make one payment monthly to the counseling agency. That payment is then allocated among your creditors, according to plan terms. You must be certain to make every payment, though, or risk getting booted from the program. You also must close all your credit cards, and not open any new credit lines, until program completion.
Debt Consolidation
Debt consolidation may be a good option if you have multiple bills. Why? Because it rolls all those debts into a single payment, making them easier to handle. Ideally, you’ll also get a better rate, which can save you money and help you to erase your debts faster.
A balance transfer is one way to consolidate – IF you have the credit scores. Here, you’ll take advantage of one of those credit cards that offer 0% interest for a promotional period of year or more and allow you to shift your higher-interest debt onto it. You must be sure to pay the card off before the introductory period ends and the rate shoots back up.
Debt Relief
Debt solutions also include debt relief, also known as debt resolution. This involves negotiating with creditors to see if they would allow you to pay less than what you owe in a one-time payment in full in exchange for having your debts marked as “settled” on your credit reports. Creditors typically go along since they realize that if they do not, you might choose bankruptcy, a filing that very well will net them nothing.
Ultimately, when it comes to choosing debt resolution companies, you’ll need to first decide the kind of debt relief that best suits your situation. That will depend on the types of debt you have and what you most need help with. If you opt for debt resolution, we recommend Achieve.