Debt Relief Program: An Overview
Debt relief can take on many forms but typically works in a straightforward way, you enroll your unsecured accounts into a debt relief program with a debt settlement company. Then, you stop making payments to your creditors. Moving forward, you and your debt experts come up with an amount that you can afford, and you put that money into a debt settlement savings account each month. Your debts are then paid for through that debt settlement savings account.
Debt relief programs can help you get out of debt faster, while debt relief services can also get you on the right track to being debt-free. But how do these programs work? Read on for more.
How Does Debt Relief Program Work?
Negotiations begin with creditors when your debt consultant feels that you’ve saved enough to begin tackling your debt. You continue to make your monthly payments into your debt settlement savings account as your accounts are settled one by one. You pay no fees to a debt settlement company until they settle the debt for you.
You can speed up the settlement process by cutting expenses or selling things you don’t need to reach your savings goal faster.
Debt Relief Program Options
There are many options to choose from when it comes to debt relief. Whether you’re looking for help to climb out of debt or help to get through it, you’re not alone, and there are many ways to accomplish your goals.
Debt consolidation takes multiple debts and combines them into a single, new account. The money from a consolidation loan or balance transfer is used to pay off your existing account balances, and instead of making multiple payments every month, you make just one monthly payment to repay the new account and chip away at your debt.
To qualify for a debt consolidation loan, you must apply for new credit and meet the lender’s eligibility requirements, which may be difficult, and may feel like an endless process, especially with bad credit, but it’s not impossible.
Credit counseling can help you with your budget, money management, debt management, and credit. Credit counselors will work with you to come up with a personalized plan to help you overcome your financial challenges. After a thorough consultation, you’re good to go.
A credit counseling agency and services are normally offered by nonprofit organizations at no cost. Double-check with your counselor to make sure, as free services aren’t always offered.
Debt Management Plans
If you work with a credit counselor or nonprofit credit counseling agency, one of the solutions they may suggest is a debt management plan (DMP). When you enroll in a DMP, you make a single monthly payment to the credit counseling organization. The organization uses the money to pay your debts based on the payment schedule it establishes with your creditors.
This is a great, structured way, to handle your debt payments and contribute to breaking down your debt faster, and with less worry.
Debt settlement companies negotiate with your creditors and debt collectors to settle your debts for less than what you owe. While that may seem like an attractive option, there are many drawbacks.
There’s no guarantee your creditors will agree to settle your debt. And even if they do agree, the companies that offer this service may advise clients to stop making debt payments and instead put the money into an account dedicated to paying off settlements.
If you follow this advice and stop making your payments, not only will your accounts continue to accrue interest and late fees, but the missed payments can have a significant negative effect on your credit.
The double trouble involved with missed payments and additional interest makes this a tough option for most.
When Should You Seek Debt Relief?
Seek debt relief when you’ve fallen behind on your payments, when you’re struggling to make your payments, when managing debt on your own has become an issue, or when you’re contemplating filing for bankruptcy.
When Behind on Credit Card Bills or Other Loan Payments
Debt relief can help structure your debt in a way that makes it easier for you to make your payments and get squared away on your debts. It’s an ideal way to catch up and maybe even get ahead of your debt.
Instead of letting your credit card bills and loan payments fall through, consider debt relief.
Not Behind on Bills Yet but Struggling to Afford Your Payments
You might not be behind on your bills, but you may feel the burden of them each month. Use debt consolidation programs to help get your bills to a manageable level. There’s no reason to wait until you fall behind on your bills to get situated.
Managing Debt on Your Own But Not Making Any Progress
Managing debt can also be an involved process. Whether your plan is new or old—if it’s not working. It’s simply not working.
Consider debt relief services to get you situated and help alleviate the pressures of managing debt when it’s not becoming less of a burden. Instead of laboring through years of managing your own debt and not making serious progress, use debt relief to set you up for success.
Contemplated Filing for Bankruptcy
Debt relief will affect your credit, but not for as long as bankruptcy will. By creating a debt relief solution to manage your debt and taking the time to understand the pros and cons of debt relief, you might be able to alleviate the potential downsides of bankruptcy and avoid the issues altogether.
A structured debt management plan can help get you on the right track without causing severe and long-lasting issues.
Your Debt Relief Program Partner You Can Trust
Ready to slash away at your debt and get on the right track with a debt management plan, debt consolidation loans, or debt relief option with the help of credit counseling agencies?
Alleviate Financial is your tried and true partner in handling serious debt. Whether you’re looking to get ahead on your payments, manage your debt because you’ve fallen behind, or you’re ready to explore options beyond bankruptcy.
Not sure about whether you should enroll in a debt relief program? We are here for you and we can help determine what the best course of action is for you and your debt relief service needs!
Schedule a call today, or check if you’re qualified for our proven debt relief options. You’ll walk away with peace of mind that you’re on the right track to success. Contact us at 800-877-2309 at Alleviate Financial today!